Sold at split off point or processed further
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Wallace Company produces two products from a common input. Data relating to the two products are given below:
Product A Product B
Sales value at the split off point.... $60,000 $120,000
Allocated joint product costs... $45,000 $90,000
Sales value after further processing... $90,000 $200,000
Cost of further processing... $20,000 $85,000
Determine which of the products should be sold at the split off point, and which should be processed further before sale. Use the form that appears below.
Product A Product B
Sales value after further processing... $________ $________
Sales value at the split off point... _________ _________
Incremental revenue from further processing... _________ _________
Less cost of further processing... _________ _________
Profit (loss) from further processing... $________ $________
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Solution Summary
The solution explains how to determine whether the products should be sold at split off point or processed further
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Product A Product B
Sales value after further processing... 90,000 200,000
Sales value at ...
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