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
Process
Further Sales Value
After Further
Processing
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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