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21) The split-off point the juncture in manufacturing where the

Question : 21) The split-off point the juncture in manufacturing where the : 1419234

 

21) The split-off point is the juncture in manufacturing where the joint products become individually identifiable.

 

22) The relevant information for a sell or process further decision for joint products includes the costs incurred before the split-off point.

 

23) It is profitable to extend processing or to incur additional costs on a joint product if the additional revenue exceeds the joint cost.

 

24) The allocation of joint costs to joint products should affect the decision to sell or process the joint products further.

25) Foster Corporation has a joint process, which produces three products, A, B and C. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year are $40,000. Other relevant data are:

 

Sales ValueSeparable ProcessingSales Value

Product          at Split-Off        Costs After Split-Off       at Completion

A$15,500$2,200$17,700

B18,0008,00023,000

C24,00011,50037,500

 

Required:

A) Which products should be processed further? Why?

B) If the Foster Company maximizes profits, what is the operating income?

26) Sealy Company has a joint process, which produces three products called A, B and C. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year are $20,000. Other relevant data are:

 

Sales ValueSeparable ProcessingSales Value

Product          at Split-Off        Costs After Split-Off       at Completion

A$94,000$28,000$115,000

B60,00010,00082,000

C66,00014,00079,000

 

Required:

A) Which products should be processed further? Why?

B) If the Sealy Company maximizes profits, what is the operating income?

 

 

 

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