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    Incremental Analysis Net Income

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    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.
    Sales Value
    at Split-off
    Point Cost to
    Further Sales Value
    After Further
    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.
    Product 12

    Product 14

    Product 16

    Determine total net income using the results from the previous part of the question.

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    Solution Summary

    The solution provides an incremental analysis net income.