Reference no: EM132617501
Odette Company makes two products from a common input. Joint processing costs up to the split-off point total P64,800 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:
Product X Product Y Total
Allocated joint processing costs............ P32,400 P32,400 P64,800
Sales value at split-off point.................. P36,000 P36,000 P72,000
Costs of further processing ................... P20,300 P14,300 P34,600
Sales value after further processing ..... P55,400 P53,000 P108,400
Required:
Problem 1: What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
Problem 2: What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?
Problem 3: What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?
Problem 4: What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?
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