Acme Company manufactures two products from a joint process. Each product can be sold at the split off point or sold after further processing. Acme incurs $33,600 of production costs before the split-off point and allocates these costs to the two products based on their relative sales values at the split-off point. Here are financial data regarding the products: Product X Product Y Allocation of joint costs $16,800 $16,800 Incremental cost of further processing $15,000 $18,700 Sales value after further processing $35,500 $45,100 What is the minimum amount of sales revenue that Acme must realize to break-even on the sale of Product X at the split-off point as opposed to selling Product X after further processing? O $15,000 $16,800 O $20,500 $31,800
Acme Company manufactures two products from a joint process. Each product can be sold at the split off point or sold after further processing. Acme incurs $33,600 of production costs before the split-off point and allocates these costs to the two products based on their relative sales values at the split-off point. Here are financial data regarding the products: Product X Product Y Allocation of joint costs $16,800 $16,800 Incremental cost of further processing $15,000 $18,700 Sales value after further processing $35,500 $45,100 What is the minimum amount of sales revenue that Acme must realize to break-even on the sale of Product X at the split-off point as opposed to selling Product X after further processing? O $15,000 $16,800 O $20,500 $31,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Acme Company manufactures two products from a joint process.
Each product can be sold at the split off point or sold after further
processing. Acme incurs $33,600 of production costs before the
split-off point and allocates these costs to the two products based on
their relative sales values at the split-off point. Here are financial data
regarding the products:
Product X
Product Y
Allocation of joint costs
$16,800
$16,800
Incremental cost of further processing
$15,000
$18,700
Sales value after further processing
$35,500
$45,100
What is the minimum amount of sales revenue that Acme must
realize to break-even on the sale of Product X at the split-off point as
opposed to selling Product X after further processing?
$15,000
$16,800
$20,500
$31,800
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