Exercise 11-42 (Algo) Sell or Process Further: Multiple Choice (LO 11-9) Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,280 gallons of Chem-X with a cost of $115,200. Additional information regarding a batch follows. If Processed FurtherProductUnits ProducedUnit Sales Value at Split-offAdditional Costs (Per Unit)Sales Value (Per Unit)M-10 28,160 $20.00 $16.00 $20.00 M-20 17,920 $24.00 $4.00 $44.00 B-60 6,400 $0.50 NA NA Oak View Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs. Required:Under these assumptions, the following product(s) should be processed further and then sold: Multiple Choice M-20 M-10 Cannot tell from the information given. Neither M-10 nor M-20 Both M-10 and M-20

Sell or Process further: the sell or process further is a marginal decision made by the company to…

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FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Exercise 11-42 (Algo) Sell or Process Further: Multiple Choice (LO 11-9)

Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,280 gallons of Chem-X with a cost of $115,200. Additional information regarding a batch follows.

			If Processed Further
Product	Units Produced	Unit Sales Value at Split-off	Additional Costs (Per Unit)	Sales Value (Per Unit)
M-10		28,160		$	20.00	$	16.00	$	20.00
M-20		17,920		$	24.00	$	4.00	$	44.00
B-60		6,400		$	0.50		NA		NA

Oak View Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs.

Required:

Under these assumptions, the following product(s) should be processed further and then sold:

Multiple Choice

M-20
M-10
Cannot tell from the information given.
Neither M-10 nor M-20
Both M-10 and M-20

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