Moreau SA 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.

Instructions

a. Determine total net income if all products are sold at the split-off point.

b. Determine total net income if all products are sold after further processing.

c. Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further.

d. Determine total net income using the results from (c) and explain why the net income is different from that determined in (b).

Transcribed Image Text:

Cost to Sales Value Sales Value after Further at Split-Off Point Process Further Processing Product 10 Product 12 Product 14 €60,000 €100,000 30,000 150,000 €190,000 35,000 215,000 15,000 55,000