2. Nando Company manufactures 3 products, A, B, and C, by the same production process which costs $100,000. Each product could be sold at split off or processed further and sold at a higher price. product Selling Price at Split Off Selling Price After Processed Additional Processing Costs A $60000 $190000 $100000 B $15000 $35000 $30000 C $55000 $215000 $150000 a. Determine the total net income if all products are sold at the split off point. b. Determine the total net income if all products are sold after further processing. c. Which product should be processed further and which product should not? Provide the incremental analysis for your answer.
2. Nando Company manufactures 3 products, A, B, and C, by the same production process which costs $100,000. Each product could be sold at split off or processed further and sold at a higher price. product Selling Price at Split Off Selling Price After Processed Additional Processing Costs A $60000 $190000 $100000 B $15000 $35000 $30000 C $55000 $215000 $150000 a. Determine the total net income if all products are sold at the split off point. b. Determine the total net income if all products are sold after further processing. c. Which product should be processed further and which product should not? Provide the incremental analysis for your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. Nando Company manufactures 3 products, A, B, and C, by the same production process which costs $100,000. Each product could be sold at split off or processed further and sold at a higher price.
| product | Selling Price at Split Off | Selling Price After Processed | Additional |
| A | $60000 | $190000 | $100000 |
| B | $15000 | $35000 | $30000 |
| C | $55000 | $215000 | $150000 |
a. Determine the total net income if all products are sold at the split off point.
b. Determine the total net income if all products are sold after further processing.
c. Which product should be processed further and which product should not? Provide the incremental analysis for your answer.
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