# Net Monetary Advantage

Mighty Meat Company makes two products from a common input. Joint processing costs up to the split-off point total $64,800 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

Product X Product Y Total

Allocated joint processing costs $32,400 $32,400 $64,800

Sales value at split-off point $36,000 $36,000 $72,000

Costs of further processing $20,300 $14,300 $34,600

Sales value after further processing $55,400 $53,000 $108,400

Required:

a. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

b. What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?

c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

https://brainmass.com/business/competitive-advantage/net-monetary-advantage-122589

#### Solution Preview

Required:

a. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

If the company sells Product X at the split-off point, the company will have the profit of

36,000 - 32,400 = 3,600

However, if the company further processes Product X, the company will have the profit of

55,400 - (32,400 + 20,300) = 2,700

Therefore, the net monetary ...

#### Solution Summary

This solution is comprised of solution and calculation to answer what is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point, what is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point, what is the minimum amount the company should accept for Product X if it is to be sold at the split-off point, what is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point.