A company manufactures three products using the same production process. The costs incurred up to the split-off point are $168,000. 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 follow: Product (a) X Y Z Number of Units Produced 4,200 8,400 3,360 Selling Price at Split-off $11.00 11.90 19.70 Selling Price after Processing $16.00 16.50 21.90 should be processed further but Additional Processing Costs $11,760 17,640 10,080 Which product(s) should be processed further and which should be sold at the split-off point? should be sold at the split-off point.
A company manufactures three products using the same production process. The costs incurred up to the split-off point are $168,000. 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 follow: Product (a) X Y Z Number of Units Produced 4,200 8,400 3,360 Selling Price at Split-off $11.00 11.90 19.70 Selling Price after Processing $16.00 16.50 21.90 should be processed further but Additional Processing Costs $11,760 17,640 10,080 Which product(s) should be processed further and which should be sold at the split-off point? should be sold at the split-off point.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company manufactures three products using the same production process. The costs incurred up to the split-off point are $168,000.
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 follow:
Product
(a)
X
Y
Z
Number of
Units Produced
4,200
8,400
3,360
Selling Price
at Split-off
$11.00
11.90
19.70
Selling Price
after Processing
$16.00
16.50
21.90
should be processed further but
Additional
Processing Costs
$11,760
17,640
10,080
Which product(s) should be processed further and which should be sold at the split-off point?
should be sold at the split-off point.
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