Purchase Solution

Solex Company

Not what you're looking for?

Ask Custom Question

Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $103,000 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, $58,000; product Y, $93,000; and product Z, $62,000.

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
Value
X $ 45,000 $ 82,000
Y $ 41,000 $ 156,000
Z $ 13,500 $ 78,200

Required:
(a) Compute the incremental profit (loss) for each product. (Negative amount should be indicated by a minus sign.)

Product X Product Y Product Z
Incremental profit (loss) $ $ $

Purchase this Solution

Solution Summary

This solution is comprised of a detailed explanation to compute the incremental profit (loss) for each product.

Solution Preview

Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $103,000 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, $58,000; ...

Purchase this Solution


Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.