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Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $95,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: product X, $53,000; product Y, $93,000; and product Z, $63,000.
Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product on an annual basis.
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