Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Oct-2001 - Nov-2016

Category > Accounting Posted 19 Aug 2017 My Price 9.00

same production process

E7-12 A company manufactures three products using the same production process. The costs incurred up to the split-off point are $200,000. These costs are allocated to the prod- ucts on the basis of their sales value at the split-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as   follows:

 

Number of        Selling Price        Selling Price             Additional Product  Units Produced              at Split-off            after Processing       Processing Costs

 

 

 

A                      3,000                    $10.00                     $15.00                         $14,000 B              6,000      11.60                               16.20                    16,000

 

C                      2,000                       19.40                        21.60                             9,000

 

Instructions

 

(a)   Which information is relevant to the decision on whether or not to process the prod- ucts further? Explain why this information is relevant.

 

(b)   Which product(s) should be processed further and which should be sold at the split- off point?

 

(c)    Would your decision be different if the company was using the quantity of output to allocate joint costs? Explain.

 

Answers

Maurice Tutor
(5)
Status NEW Posted 19 Aug 2017 07:08 PM My Price 9.00

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