General chemical company gcc manufactures two products as

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Reference no: EM13586914

General Chemical Company (GCC) manufactures two products as part of a joint process: A1 and B1. Joint costs up to the split-off point total $26,500. The joint costs are allocated to A1 and B1 in proportion to their relative sales values. At the split-off point, product A1 can be sold for $45,600, whereas product B1 can be sold for $68,400. Product A1 can be processed further to make product A2, at an incremental cost of $42,500. A2 can be sold for $89,500. Product B1 can be processed further to make product B2, at an incremental cost of $52,500. B2 can be sold for $99,500.
1.Joint costs allocated to product A1 total:

$10,600.
$15,900.
$13,250.
$26,500.

2.Joint costs allocated to product B1 total:

$10,600.
$15,900.
$13,250.
$26,500.

3.The net change in operating income resulting from a decision to manufacture product A2 is:

$43,900 (increase).
$1,400 (decrease).
$1,400 (increase).
$42,500 (increase).

4.The net change in operating income resulting from a decision to manufacture product B2 is:

$21,400 (increase).
$21,400 (decrease).
$52,500 (decrease).
$31,100 (increase)

Reference no: EM13586914

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