Pharoah Inc. produces three separate products from a common process costing $100,600. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Product 10 Product 12 Product 14 Sales Value at Split-Off Point $59,300 15,600 54,500 Cost to Process Further $100,500 29.100 150,700 Sales Value after Further Processing $190,500 34,100 214,100
Pharoah Inc. produces three separate products from a common process costing $100,600. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Product 10 Product 12 Product 14 Sales Value at Split-Off Point $59,300 15,600 54,500 Cost to Process Further $100,500 29.100 150,700 Sales Value after Further Processing $190,500 34,100 214,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Calculate incremental profit/(loss) and determine which products should be sold at the split-off point and which should be
processed further. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).)
Product
Product 10
Product 12
Product 14
Incremental profit (loss)
$
$
$
Decision
Should be sold at the split-off point
✓ Should be sold at the split-off point
Should be processed further
Transcribed Image Text:Pharoah Inc. produces three separate products from a common process costing $100,600. Each of the products can be sold at the
split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent
period.
Product 10
Product 12
Product 14
Sales Value
at Split-Off
Point
$59,300
15,600
54,500
Cost to
Process
Further
$100,500
29,100
150,700
Sales Value
after Further
Processing
$190,500
34,100
214,100
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