Question: Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $44,500 a year. The company allocates these
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $44,500 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: 1 Product X $26,700 $30,000 $24,000 $47,400 Product Y $17,800 $20,000 $18,300 $57,900 Total $ 44,500 $50,000 $ 42,300 $105,300 Allocated joint processing costs Sales value at split-off point Costs of further processing Sales value after further processing 005756 Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? a. b. c. Minimum acceptable amount d. Minimum acceptable amount
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