Sasaw Company produces products C, I and T for a joint cost of P 200,000. Each product may be sold at its splitoff point or processed further. Additional processing costs are entirely variable. Relevant data are given below: Product Sales Value at Split-Off C P 100,000 I 200,000 T 50,000 . 350,000 Product Additional processing costs C P 80,000 I 40,000 T 60,000 . 180,000 Product Final sales value C P 250,000 I 200,000 T 100,000 . 550,000 REQUIREMENTS: 1. Which product(s) should the company sell at split-off point? 2. If the company can only sell all the products at split-off point or process all the products further beyond the split-off point, then which option is recommended?
SELL OR PROCESS FURTHER
Sasaw Company produces products C, I and T for a joint cost of P 200,000. Each product may be sold at its splitoff point or processed further. Additional
Product Sales Value at Split-Off
C P 100,000
I 200,000
T 50,000 .
350,000
Product Additional processing costs
C P 80,000
I 40,000
T 60,000 .
180,000
Product Final sales value
C P 250,000
I 200,000
T 100,000 .
550,000
REQUIREMENTS:
1. Which product(s) should the company sell at split-off point?
2. If the company can only sell all the products at split-off point or process all the products further beyond the split-off point, then which option is recommended?
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