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Prepare an incremental analysis for the sell-or-process

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Reference no: EM132652335

Problem - Grand Scarf Company manufactures 3 products using the same production process. The costs incurred up to the split-off point are RM20,000. These costs are allocated to the products on the basis of their sales value at the split-off point. Data for the operation is as below:

Product

Number of Units Produced

Selling-Price at Split-off (per unit) (RM)

Selling-Price after Processing (per unit) (RM)

Additional Processing Costs (RM)

Kate

2,000

6.20

11.00

11,000

Embun

3,000

7.70

12.50

8,000

Catalina

1,000

16.30

19.40

2,000

Required -

a) Prepare an incremental analysis for the sell-or-process-further decision.

b) Determine whether Grand Scarf Company should sell at split of point or process further.

Reference no: EM132652335

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