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What minimum amount the company should accept for product

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Reference no: EM132516237

Iaci Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 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 $22,400 $19,600 $42,000

Sales value at split-off point $32,000 $28,000 $60,000

Costs of further processing $16,100 $23,500 $39,600

Sales value after further processing $48,400 $52,300 $100,700

Required:

Question (a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

Question (b) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?

Question (c) What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

Question (d) What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

Reference no: EM132516237

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