A company manufactures three products using the same production process. The costs incurred up to the split-off point are $220,000. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of unit produced, the selling prices per unit of the three products at the split-off point and after further processing, and the addition processing costs are as follow: Product (a) X Y N Number of Units Produced 5,500 11,000 4,400 Selling Price at Split-off $10.00 11.60 19.40 Selling Price after Processing $15.00 16.20 should be processed further but 21.60 Additional Processing Costs $15,400 23,100 13,200 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 $220,000. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of unit produced, the selling prices per unit of the three products at the split-off point and after further processing, and the addition processing costs are as follow: Product (a) X Y N Number of Units Produced 5,500 11,000 4,400 Selling Price at Split-off $10.00 11.60 19.40 Selling Price after Processing $15.00 16.20 should be processed further but 21.60 Additional Processing Costs $15,400 23,100 13,200 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
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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
$220,000. 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:
Number of
Product Units Produced
(a)
X
Y
N
5,500
11,000
4,400
Selling Price
at Split-off
$10.00
11.60
19.40
Selling Price
after Processing
$15.00
16.20
should be processed further but
21.60
Additional
Processing Costs
$15,400
23,100
13,200
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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