A company produces three different produces frm a joint process. Each product can be sold at the
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A company produces three different produces frm a joint process. Each product can be sold at the split-off | |||||||||
point as follows: | |||||||||
Product A | Product B | Product C | |||||||
Number of units | 1000 | 500 | 250 | ||||||
Selling prices per unit | $ 30 | $ 25 | $ 30 | ||||||
The company is considering processing Product B further and selling it for $40 per unit. The additional | |||||||||
processing could be done within the exisiting facilities of the company. The total additional costs | |||||||||
of processing it further include direct labor of $4000 and direct material of $2000. | |||||||||
Should product B be processed furhter? | |||||||||
No, as total profits will decrease by 8500 | |||||||||
No, as total profits will decrease by 3500 | |||||||||
Yes, as total profits will increase by 1500 | |||||||||
yes, as total profits will increase by 9000 |
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
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