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Dock Corporation makes two products from a common input. Joint processing costs up to the split-off ...

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Dock Corporation makes two products from a common input. Joint processing costs up to the split-off ...

Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 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 X	Product Y	Total
Allocated joint processing costs	$ 16,800	$ 16,800	$ 33,600
Sales value at split-off point	$ 24,000	$ 24,000	$ 48,000
Costs of further processing	$ 15,000	$ 18,700	$ 33,700
Sales value after further processing	$ 35,500	$ 45,100	$ 80,600

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

▸ ($3,500)

▸ $27,700

▸ $20,500

▸ $3,700

Textbook

Introduction to Managerial Accounting: Brewer Edition: 9e

Edition: 9^th

Authors: Brewer, Garrison, Noreen

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