Reference no: EM132610285

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 (disadvantage) of processing Product X beyond the split-off point?

A) $27,600.

B) $22,400.

C) ($3,600).

D) $1,600.