Corporation has a joint process thatproduces three products: X, Y, and Z. Each p
ID: 2433422 • Letter: C
Question
Corporation has a joint process thatproduces three products: X, Y, and Z. Each product may besold at split-off or processed further and then sold. Joint-processing costs for a year amount to $100,000. Otherrelevant data are as follows:
Separable
Processing
SalesValue Costsafter SalesValue
Product atSplit-off Split-off at Completion
X $128,000 $16,000 $160,000
Y 50,000 26,000 76,000
Z 25,600 20,000 40,000
ProductY _____.
Corporation has a joint process thatproduces three products: X, Y, and Z. Each product may besold at split-off or processed further and then sold. Joint-processing costs for a year amount to $100,000. Otherrelevant data are as follows:
Separable
Processing
SalesValue Costsafter SalesValue
Product atSplit-off Split-off at Completion
X $128,000 $16,000 $160,000
Y 50,000 26,000 76,000
Z 25,600 20,000 40,000
ProductY _____.
A. should beprocessed further to increase profits by $26,000 B. should be sold atsplit-off since processing further would only reduce profits by$26,000 C. should beprocessed further to increase profits by $76,000 D. can be processedfurther or sold at split-off; there is no difference inprofitExplanation / Answer
Correct ans is D As Sales at Split off is valued at $50,000. If you process it, youincur $26000. Thus your Cost after split off is 76000 & saleprice is also 76000. So you have no profit orloss.