See the attachment.
Benson, Inc. produces three separate products from a common process costing $100,000. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period.
Point Cost to
Further Sales Value
Product 12 $50,000 $100,000 $190,000
Product 14 10,000 30,000 35,000
Product 16 60,000 150,000 220,000
Determine total net income if all products are sold at the split-off point.
Determine total net income if all products are sold after further processing.
Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further.
Determine total net income using the results from the previous part of the question.
The solution provides an incremental analysis net income.