Explore BrainMass

Explore BrainMass

    Sell at split off or process further

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please see attached file.

    Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $100,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: product X, $50,000; product Y, $90,000; and product Z, $60,000.

    Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below:

    Product Additional
    Processing Cost Sales
    X $ 35,000 $ 80,000
    Y $ 40,000 $ 150,000
    Z $ 12,000 $ 75,000

    (a) Compute the incremental profit (loss) for each product. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)

    © BrainMass Inc. brainmass.com October 9, 2019, 11:41 pm ad1c9bdddf


    Solution Summary

    The solution explains the calculations relating to selling at split off point or processing further