Elizabeth Pharmaceutical produces several medicines. Each product can be sold at the split-off point or processed further.
Question:
Elizabeth Pharmaceutical produces several medicines. Each compound can be sold at the split-off point or processed further. The following results apply to March:
Product | Sales Value at Split-off Point | Costs of Additional Processing | Sales Value After Additional Processing |
Savior I | $19,000 | $ 5,300 | $26,000 |
Savior II | 23,500 | 10,500 | 33,000 |
Savior III | 16,000 | 9,500 | 25,000 |
Product | Incremental revenue | Incremental cost | Profit or loss from Additional processing | |
Savior I | _________ | $ 5,300 | _________ | |
Savior II | _________ | 10,500 | _________ | |
Savior III | __________ | 9,500 | __________ | |
After determining which products should be sold at the split-off point and which should be processed further, the TOTAL REVENUE provided by these three products would be
a. $84,000.
b.$58,500
c. $77,000
d. $65,500
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger