Question: Chen minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Larco, Marco and Narco. Each

Chen minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Larco, Marco and Narco. Each of these materials can be sold as is, or processed further and sold for a higher price. The company incurs joint costs of 180,000$ to process one batch of the raw material that produces the three products. The following cost and sales information available for one batch of each product

Sales value at Split-Off point

Allocated Joint Costs Cost to Process Further Sales Value of Processed Product
Larco $200,000 $40,000 $100,000 330,000
Marco 300,000 60,000 125,000 400,000
Narco 400,000 80,000 150,000 600,000

Determine whether each of the three joint products should be sold as is or processed further

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