Sales Values and Additional Cost if Processed Beyond Split-off Sales Value $550,000 540,000 975,000 Sales Value at Split-off $400,000 350,000 850,000 Additional Cost $130,000 240,000 118,000 Product K L
Salt Company manufactures products J, K, and L in a joint process. The company
incurred $480,000 of joint
following data that related to production:
An analysis revealed that all costs incurred after the split-off point are variable and
directly traceable to the individual product line.
Required:
A. If Salt allocates joint costs based on the products' sales values at the split-off
the point, what amount of joint cost would be allocated to product J?
B. If the production of J totaled 50,000 gallons for the period, determine the relevant cost
per gallon that should be used in decisions that explore whether to sell at the split-off
point or process further? Briefly explain your answer.
C. At the beginning of the current year, Salt decided to process all three products
beyond the split-off point. If the company desired to maximize income, did it err in
regards to its decision with any of the products and by how much?
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