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FINANCIAL ACCOUNTING
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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**Question 1 of 4** ### Incremental Profit (Loss) To determine the financial viability of either selling a product as is or processing it further, input the respective incremental profit or loss for each product: Spock, Uhura, and Sulu. Incremental profit should be indicated as a positive number, while a loss should be shown with a negative sign or in parentheses (e.g., -45 or (45)). **Spock** - Incremental profit (loss): $ [Input Box] **Uhura** - Incremental profit (loss): $ [Input Box] **Sulu** - Incremental profit (loss): $ [Input Box] **Decision Making:** Indicate whether each of the three joint products should be sold as is or processed further by selecting the appropriate option from the dropdown menu. **Spock** - [Dropdown Menu] **Uhura** - [Dropdown Menu] **Sulu** - [Dropdown Menu] **Additional Instructions:** - Click "Save for Later" to save your work. Note that the last save was 17 minutes ago. - Saved work will be auto-submitted on the due date. Auto-submission can take up to 10 minutes. - Be aware that using multiple attempts will impact your score with a 25% score reduction after the first attempt. **Submit Answer:** - Click "Submit Answer" when you have completed your responses. **Status:** - Attempts: 1 of 2 used - Current score: 0 / 12.5
Transcribed Image Text:**Question 1 of 4** ### Incremental Profit (Loss) To determine the financial viability of either selling a product as is or processing it further, input the respective incremental profit or loss for each product: Spock, Uhura, and Sulu. Incremental profit should be indicated as a positive number, while a loss should be shown with a negative sign or in parentheses (e.g., -45 or (45)). **Spock** - Incremental profit (loss): $ [Input Box] **Uhura** - Incremental profit (loss): $ [Input Box] **Sulu** - Incremental profit (loss): $ [Input Box] **Decision Making:** Indicate whether each of the three joint products should be sold as is or processed further by selecting the appropriate option from the dropdown menu. **Spock** - [Dropdown Menu] **Uhura** - [Dropdown Menu] **Sulu** - [Dropdown Menu] **Additional Instructions:** - Click "Save for Later" to save your work. Note that the last save was 17 minutes ago. - Saved work will be auto-submitted on the due date. Auto-submission can take up to 10 minutes. - Be aware that using multiple attempts will impact your score with a 25% score reduction after the first attempt. **Submit Answer:** - Click "Submit Answer" when you have completed your responses. **Status:** - Attempts: 1 of 2 used - Current score: 0 / 12.5
### Joint Product Cost Analysis Pharoah Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $182,100 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. #### Cost and Sales Information Table | Product | Sales Value at Split-Off Point | Allocated Joint Costs | Cost to Process Further | Sales Value of Processed Product | |---------|-------------------------------|-----------------------|-------------------------|---------------------------------| | Spock | $209,600 | $40,200 | $109,700 | $300,900 | | Uhura | $299,800 | $60,900 | $84,700 | $400,600 | | Sulu | $455,800 | $81,000 | $250,200 | $799,600 | #### Analysis Determine the incremental profit or loss that each of the three joint products generates. *(Enter negative amounts using either a negative sign preceding the number e.g., -45 or parentheses e.g., (45).)* | | Spock | Uhura | Sulu | |-----------|-------|-------|-------| | Incremental profit (loss) | $ | $ | $ | #### Steps to Complete the Analysis: 1. **Calculate the Incremental Revenue** Incremental Revenue = Sales Value of Processed Product - Sales Value at Split-Off Point 2. **Calculate the Incremental Cost** Incremental Cost = Cost to Process Further 3. **Calculate the Incremental Profit (Loss)** Incremental Profit (Loss) = Incremental Revenue - Incremental Cost Repeat the above calculation for each product (Spock, Uhura, Sulu) to determine the incremental profit or loss. ### Conclusion By conducting this analysis, Pharoah Minerals can determine whether it is financially advantageous to sell each joint product as is at the split-off point or to process it further. This information is vital for making informed production and sales decisions.
Transcribed Image Text:### Joint Product Cost Analysis Pharoah Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $182,100 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. #### Cost and Sales Information Table | Product | Sales Value at Split-Off Point | Allocated Joint Costs | Cost to Process Further | Sales Value of Processed Product | |---------|-------------------------------|-----------------------|-------------------------|---------------------------------| | Spock | $209,600 | $40,200 | $109,700 | $300,900 | | Uhura | $299,800 | $60,900 | $84,700 | $400,600 | | Sulu | $455,800 | $81,000 | $250,200 | $799,600 | #### Analysis Determine the incremental profit or loss that each of the three joint products generates. *(Enter negative amounts using either a negative sign preceding the number e.g., -45 or parentheses e.g., (45).)* | | Spock | Uhura | Sulu | |-----------|-------|-------|-------| | Incremental profit (loss) | $ | $ | $ | #### Steps to Complete the Analysis: 1. **Calculate the Incremental Revenue** Incremental Revenue = Sales Value of Processed Product - Sales Value at Split-Off Point 2. **Calculate the Incremental Cost** Incremental Cost = Cost to Process Further 3. **Calculate the Incremental Profit (Loss)** Incremental Profit (Loss) = Incremental Revenue - Incremental Cost Repeat the above calculation for each product (Spock, Uhura, Sulu) to determine the incremental profit or loss. ### Conclusion By conducting this analysis, Pharoah Minerals can determine whether it is financially advantageous to sell each joint product as is at the split-off point or to process it further. This information is vital for making informed production and sales decisions.
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