Assume a company has two products-A and B-that emerge from a joint process. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $16,000 and then sold for $25per unit. What is the incremental revenue earned by further processing Product A?Multiple Choice$18,000$8,000$4,000$2,000

In computation and allocation of joint costs it can be done in the following methods namely: 1.…

Answered: O S18.000 o00es O O $400 O s2.000

Business

Accounting

O S18.000 o00es O O $400 O s2.000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 64P: Sell or Process Further, Basic Analysis Shenista Inc. produces four products (Alpha, Beta, Gamma,...

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Your Corporation produces products P, Q, and R from a joint production process. Each product may be sold at the split-off point or processed further. Joint production costs of $80,000 per year are allocated to the products based on the relative number of units produced. Which products should be processed further? P Q R Units produced 3,000 6,000 1,000 Selling price at split off $37,500 $46,500 $15,500 Cost to process further $10,000 $30,000 $5,000 Selling price after processing $50,000 $65,000 $25,000 a. P, Q and R b. P and Q c. Just P d. P and R e. Just Q
ats Assume a company has three products-A, B, and C-that emerge from a joint process. The joint processing costs that are incurred up to the split-off point equal $1,200,000. The selling prices and outputs for each product at the split-off point are as follows: Product A B С Selling Price $33 per pound $29 per pound $24 per pound Product A B C Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows: Output 14,000 pounds 18,000 pounds 19,000 pounds Additional Processing Costs $65,000 $72,000 $88,000 Selling Price $37 per pound $34 per pound $30 per pound The company is trying to decide whether to retain or discontinue the entire joint manufacturing process. What is the financial advantage (disadvantage) of continuing to operate the entire joint manufacturing process?
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A company currently produces three products from a joint process. The joint process has total costs of $515,000 per month. All three products, A, B, and C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Product A B Units 4,500 18,000 10,500 Immediate Sales Price $18 20 27 Later Sales Unit Cost of Further Processing $ 2.00 4.00 4.00 Price $ 19 25 33 Required: a-1. Should Product A be sold immediately or sold after processing further? a-2. How much will the decision affect profit? b-1. Should Product B be sold immediately or sold after processing further? b-2. How much will the decision affect profit? c-1. Should Product C be sold immediately or sold after processing further? c-2. How much will the decision affect profit?
Joint products A and B emerge from common processing that costs $114,000 and yields 3,800 units of Product A and 2,600 units of Product B. Product A can be sold for S 260 per unit. Product B can be sold for $190 per unit. How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values? a. $71000 b. $76000 c. $73500 d. $66000
Use the following information to answer questions 7 through 9: A joint production process that cost $240,000 generated two main products. P1 has 15,000 units and can be sold at the split-off point for $300,000. P2 has 25,000 units and can be sold at the split-off point for $200,000. A by-product can be sold for $30,000. a. $120,000 7. Using the net realizable value method, how much of the joint costs would be allocated to P1? b. $144,000 c. $156,000 d. $183,000 8. Using the physical quantities method, how much of the joint costs would be allocated to P1? a. $90,000 b. $120,000 c. $150,000 d. $180,000 9. If the sale value of the by-product is deducted from the joint costs of the main products, how much is Pl's share of the total costs? a. $126,000 b. $216,000 C $105,000 d. $184,000 10. The relevant data for deciding whether to process further are: Additional revenue after further processing. b. Joint costs. Additional costs of processing further. d. Both a, and c 11. Which of the…
The Freed Company produces three products, X, Y, Z, from a single raw material input. Product Y can be sold at the split-off point for total revenues of $50,000, or it can be processed further at a total cost of $16,000 and then sold for $68,000. Product Y: А. Should be sold at the split-off point, rather than processed further. В. Would increase the company's overall net operating income by $18,000 if processed further and then sold. С. Would increase the company's overall net operating income by $68,000 if processed further and then sold. D. Would increase the company's overall net operating income by $2,000 if processed further and then sold. Е. None of the above
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $14. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost plus assuming 22% transfer price? • Variable cost per unit $7.27 Fixed cost per unit 1.93 • Division B sales price of Component X 14.50
Porvide answer in table format Cobe Company has already manufactured 19,000 units of Product A at a cost of $25 per unit. The 19,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $230,000 total additional cost and be converted into 5,500 units of Product B and 11,000 units of Product C. Per unit selling price for Product B is $107 and for Product C is $56. 1. Prepare an analysis that shows whether the 19,000 units of Product A should be processed further or not?
1. What is the operating profit earned by the three products for one quarter? 2. Should the division process Product Alpha further or sell it at split-off? What is the effect of the decision on quarterly operating profit? equipment costing P15,400 per quarter. Additional materials and labor also The revenues from each product are as follows: Alpha, P100,000; Beta, process Alpha further means that the company must rent some special Management is considering processing Alpha beyond the split-off point, which would increase the sales values of Alpha to P120,000. However, to Problem 17 (Sell or Process Further; Basic Analysis) SHE, Inc., produces three products (Alpha, Beta, and Gamma) from a common input. The joint costs for a typical quarter follow: Direct materials Direct labor Overhead P500,000 36,000 72,000 The revenues from each product are as follows: Alpha, P100,000; Bete. P93,000; and Gamma, P30,000. Management is considering processing Alpha beyond the split-off poo equipment…
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $14. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost plus assuming 22% transfer price? • Variable cost per unit $6.71 • Fixed cost per unit 1.03 • Division B sales price of Component X 14.50