Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,000 gallons of Chem-X with a cost of $90,000. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 22,000 $ 5.00 $ 2.00 $ 6.00 M-20 14,000 $ 10.00 $ 4.00 $ 16.00 B-60 5,000 $ 0.50 NA NA Oak View Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs. Required:
Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,000 gallons of Chem-X with a cost of $90,000. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 22,000 $ 5.00 $ 2.00 $ 6.00 M-20 14,000 $ 10.00 $ 4.00 $ 16.00 B-60 5,000 $ 0.50 NA NA Oak View Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs. Required: Under these assumptions, the following product(s) should be processed further and then sold:
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