Exercise 20-11

Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $177,000 to process one batch of the raw material that produces the three joint products. The following cost and sales information is 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
Spock			$209,000			$39,000			$109,000			$299,000
Uhura			299,000			59,000			84,000			399,000
Sulu			454,000			79,000			249,000			799,000

Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Spock		Uhura		Sulu
Incremental profit (loss)		$		$		$

Indicate whether each of the three joint products should be sold as is, or processed further.

Spock		sold as isprocess further
Uhura		process furthersold as is
Sulu		process furthersold as is

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