Prosner Corp. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $500,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. Each product may be sold at the split-off point or processed further. The additional processing costs and sales value after further processing for each product (on an annual basis) are:

The €œFurther Processing Costs€ consist of variable and avoidable fixed costs.

Required:
Which product or products should be sold at the split-off point, and which product or products should be processed further? Showcomputations.

Product D. Product F. Product G Sales Value at Split-Off S300,000 S275.000 S195,000 Further Processing Costs S125,000 S210,000 S135,000 Sales Value After Further Processing S534,000 450,000 S360,000