Reference no: EM132608280

Dowchow Company makes two products from a common input. Joint processing costs up to the split-off point total $38,400 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              20,800                17,600                           38,400

Sales Value at Split-Off Point                     26,000                22,000                          48,000

Costs of Further Processing                        22,600                   20,400                         43,000

Sales Value after Further Processing                 45,000                   45,900                     90,900

Problem 1: What is the net monetary advantage of processing Product Y beyond the split-off point?

A) $25,500.

B) $3,500.

C) $29,900.

D) $7,900.