Conrad Miller owns a small sheet metal business. He produces three different types of sheet metal. Their sizes are similar, but they have different degrees of flexibility. Costs are allocated based on the sales value at split-off point method. Additional information for

March production follows:

REQUIRED
A. Assuming that the 20,000 units of Very Flexible were processed further and sold, what is the gross margin on this sale?
B. Calculate the gain or loss from processing the productfurther.

Transcribed Image Text:

Very Flexible Total 200,000 $900,000 $1,500,000 $130,000 $1,648,000 Stiff 100,000 Flexible 80,000 Units produced Joint costs Sales value at split-off point Additional cost if processed further Sales value if processed further 20,000 $840,000 $540,000 $30,000 $948,000 $565,000 120,000 $12,000 $135,000 $88,000