What is the net monetary advantage

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Reference no: EM13505174

Iden Company makes two products from a common input. Joint processing costs up to the split-off point total $64,800 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

$32,400

$32,400

$64,800

Sales value at split-off point

$36,000

$36,000

$72,000

Costs of further processing

$20,300

$14,300

$34,600

Sales value after further processing

$55,400

$53,000

$108,400

Required:

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

b. What is the net monetary 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?

 

Reference no: EM13505174

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