Two products, IF and RI, emerge from a joint process. Product IF has been allocated $16,300 of the total joint costs of $37,000. A total of 2,300 units of product IF are produced from the joint process. Product IF can be sold at the split-off point for $11 per unit, or it can be processed further for an additional total cost of $10,300 and then sold for $13 per unit. If product IF is processed further and sold, what would be the effect on the overall profit of the company compared with sales in its unprocessed form directly after the split-off point? a. $19,600 more profit b. $10,600 more profit c. $23,200 less profit d. $5,700 less profit

Two products, IF and RI, emerge from a joint process. Product IF has been allocated $16,300 of the total joint costs of $37,000. A total of 2,300 units of product IF are produced from the joint process. Product IF can be sold at the split-off point for $11 per unit, or it can be processed further for an additional total cost of $10,300 and then sold for $13 per unit. If product IF is processed further and sold, what would be the effect on the overall profit of the company compared with sales in its unprocessed form directly after the split-off point? a. $19,600 more profit b. $10,600 more profit c. $23,200 less profit d. $5,700 less profit

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products

Section: Chapter Questions

Problem 14E: LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of...

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Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were 50,000, and 14,000 units of overs and 36,000 units of unders were produced. Separable processing costs beyond the split-off point were as follows: overs, 18,000; unders, 23,040. Overs sell for 2.00 per unit; unders sell for 3.14 per unit. Required: 1. Allocate the 50,000 joint costs using the estimated net realizable value method. 2. Suppose that overs could be sold at the split-off point for 1.80 per unit. Should Pacheco sell overs at split-off or process them further? Show supporting computations.
Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?
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Two products, QI and VH, emerge from a joint process. Product QI has been allocated $24,300 of the total joint costs of $45,000. A total of 3,100 units of product QI are produced from the joint process. Product QI can be sold at the split-off point for $15 per unit, or it can be processed further for an additional total cost of $11,100 and then sold for $17 per unit. If product QI is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point?
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