show calculations

Question 3 (10 mins, 15 marks)

Bowen Wave Company produces products P, Q, R from a joint process. Each product may be sold at the split off point or be processed further. Joint production costs of $81,000 are allocated to the products based on the relative number of units produced.

Data for the current year operations follow:

Product	Units Produced	Allocated Joint Production Cost	Sales Value at Spit off
P	4,000	$ 28,000	$ 38,000
Q	7,000	$ 49,000	$ 47,000
R	2,000	$ 14,000	$ 16,000

Product P can be processed beyond the split off point for an additional cost of $10,000 and can then be sold for $50,000. Product Q can be processed beyond the split off point for an additional $35,000 and then sold for $65,000. Product R can be processed beyond the split off point for an additional $6,000 and then sold for $25,000.

Required:

Which products should be processed beyond the split off point? Show your calculations