Stahl Inc. produces three separate products from a common process costing $100,800. 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.
Stahl Inc. produces three separate products from a common process costing $100,800. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Stahl Inc. produces three separate products from a common process costing $100,800. 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.
| Sales Value at Split-Off Point |
Cost to Process Further |
Sales Value after Further Processing |
|||||||||||
| Product 10 | $60,400 | $100,600 | $190,000 | ||||||||||
| Product 12 | 15,600 | 30,100 | 35,400 | ||||||||||
| Product 14 | 55,500 | 150,800 | 214,500 |
Determine total net income if all products are sold at the split-off point.
| Net income | $ |
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Determine total net income if all products are sold after further processing.
| Net income | $ |
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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 e.g. -45 or parentheses e.g. (45).)
| Product | Incremental profit (loss) | Decision | |||
| Product 10 | $ | ||||
| Product 12 | $ | ||||
| Product 14 | $ |
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Determine total net income using the results from previous part.
Is the net income different from that determined in part (b)?
| Net income | $ |
Is the net income different from that determined in part (b)?
| , net income is by $ |
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