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katieleex0x katieleex0x
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A year ago

Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $43,200 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

Product XProduct YTotal
Allocated joint processing costs$ 25,600$ 17,600$ 43,200
Sales value at split-off point$ 32,000$ 22,000$ 54,000
Costs of further processing$ 15,900$ 17,400$ 33,300
Sales value after further processing$ 47,500$ 40,800$ 88,300

Required:

a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point?

b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point?

c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
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durandaldurandal
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