2. ABC Company uses a joint process to produce products A, B, and C. The joint production costs for 201Awere 500,000 and were allocated using relative sales value at the split-off point method.Each product may be sold at its split-off point or processed further. Additional processing costs are entirelyvariable.AdditionalSales Value atFinal SalesProductsProcessingCostsP130,000100,000140,000Split-offValueP300,000120,000250,000420,000230,000AB400,000P1,050,000P670,000P370,000a. To maximize profit, which product/s should be sold at split-off point and be processed further,respectively?b. If the alternative were to sell at split-off point or to process further all products, which alternativewould be recommended?

Given joint costs = 500,000 These joint costs should be allocated to products based on their sales…

ABC Company uses a joint process to produce products A, B, and C. The joint production costs for 201A were 500,000 and were allocated using relative sales value at the split-off point method. Each product may be sold at its split-off point or processed further. Additional processing costs are entirely variable. Additional Sales Value at Final Sales Processing Costs P130,000 Products Split-off Value P300,000 120,000 250,000 P670,000 A 420,000 230,000 400,000 P1,050,000 в 100,000 140,000 P370,000 a. To maximize profit, which product/s should be sold at split-off point and be processed further, respectively? b. If the alternative were to sell at split-off point or to process further all products, which alternative would be recommended?

ABC Company uses a joint process to produce products A, B, and C. The joint production costs for 201A were 500,000 and were allocated using relative sales value at the split-off point method. Each product may be sold at its split-off point or processed further. Additional processing costs are entirely variable. Additional Sales Value at Final Sales Processing Costs P130,000 Products Split-off Value P300,000 120,000 250,000 P670,000 A 420,000 230,000 400,000 P1,050,000 в 100,000 140,000 P370,000 a. To maximize profit, which product/s should be sold at split-off point and be processed further, respectively? b. If the alternative were to sell at split-off point or to process further all products, which alternative would be recommended?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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