PLEASE SHOW ALL WORKING.

Question 3:

Collie Company has a joint process that produces three products: R, D and A. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $300,000. Other relevant data are as follows:

Product	Sales Value at Split-Off		Costs after Split-Off		Sales Value at Completion
	$		$		$
R	120,000		260,000		420,000
D	80,000		140,000		190,000
A	150,000		190,000		350,000

Required:

1. Determine total net income if all products are sold at split-off point. 2 Marks
2. Determine total net income if all products are sold after processing. 2 Marks
3. Using incremental analysis determine which products should be sold at split-off point and which should be processed further. 6 Marks