Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this process is as follows: Product 1 Product 2 Product 3 Sales Price at split-off point $16 $12 $5 Allocated joint costs $6,000 $6,000 $6,000 Sales Price after further processing $20 $18 $14 Cost of further processing $6,360 $1,420 $2,650 Product Quantity 1,000 lb. 1,000 lb. 1,000 Ib. Q. What would be the additional amount of profit that Corp. would gain from further processing the product(s) that is/are more profitable to process further rather than be sold at the split-off point?

Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this process is as follows: Product 1 Product 2 Product 3 Sales Price at split-off point $16 $12 $5 Allocated joint costs $6,000 $6,000 $6,000 Sales Price after further processing $20 $18 $14 Cost of further processing $6,360 $1,420 $2,650 Product Quantity 1,000 lb. 1,000 lb. 1,000 Ib. Q. What would be the additional amount of profit that Corp. would gain from further processing the product(s) that is/are more profitable to process further rather than be sold at the split-off point?

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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