Reference no: EM132953905
Penelope Signal Company produces products R, J, and C from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $92,000 per year are allocated to the products based on the relative number of units produced.
Data for Penelope's operations for the current year are as follows:
Product R can be processed beyond the split-off point for an additional cost of $26,000 and can then be sold for $105,000.
Product J can be processed beyond the split-off point for an additional cost of $38,000 and can then be sold for $117,000.
Product C can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $57,000.
Required:
Problem 1: Which products should be processed beyond the split-off point?