Oval Company produces four products for a joint cost of P10,000. The firm could sell the products
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Question:
Oval Company produces four products for a joint cost of P10,000. The firm could sell the products at the split-off point for the following amounts:
M - P15,000
I - P10,000
L - P2,000
O - P0
At present, the products are processed beyond the split-off point and they are sold as follows:
| Products | Sales | Additional Processing Cost |
| M | P40,000 | P28,000 |
| I | 30,000 | 16,000 |
| L | 20,000 | 14,000 |
| O | 2,500 | 3,000 |
a. Which products should the firm sell at split off point?
b. If the company takes the most profitable action, then what will be its profit? Show your computations.
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