A company manufactures three products using the same production process. The costs incurred up to the split-off point are $208,400. These costs are allocated to the products 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. Product Number of Units Produced Selling Price at Split-Off Selling Price after Processing Additional Processing Costs D 4,470 $10.20 $15.10 $15,823 E 5,500 11.60 16.60 19,800 F 1,710 19.70 22.80 8,401 (b1) Determine the incremental profit (loss) of each product(s). Product D Product E Product F Incremental profit (loss) $ $ $ (b2) Which product(s) should be processed further and which should be sold at the split-off point? Product D Product E Product F
A company manufactures three products using the same production process. The costs incurred up to the split-off point are $208,400. These costs are allocated to the products 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. Product Number of Units Produced Selling Price at Split-Off Selling Price after Processing Additional Processing Costs D 4,470 $10.20 $15.10 $15,823 E 5,500 11.60 16.60 19,800 F 1,710 19.70 22.80 8,401 (b1) Determine the incremental profit (loss) of each product(s). Product D Product E Product F Incremental profit (loss) $ $ $ (b2) Which product(s) should be processed further and which should be sold at the split-off point? Product D Product E Product F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company manufactures three products using the same production process. The costs incurred up to the split-off point are $208,400. These costs are allocated to the products 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
| Product | Number of Units Produced |
Selling Price at Split-Off |
Selling Price after Processing |
Additional Processing Costs |
||||||||||
| D | 4,470 | $10.20 | $15.10 | $15,823 | ||||||||||
| E | 5,500 | 11.60 | 16.60 | 19,800 | ||||||||||
| F | 1,710 | 19.70 | 22.80 | 8,401 |
(b1)
Determine the incremental
| Product D | Product E | Product F | |||||
| Incremental profit (loss) | $ | $ | $ |
(b2)
Which product(s) should be processed further and which should be sold at the split-off point?
| Product D | |||
| Product E | |||
| Product F |
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