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TB Problem Qu. 12-203 lbsen Company makes two products from a common... lbsen Company makes two products from a common input.

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Answer #1

a. Increase in sales from further processing = Sales value after further processing - Sales value at split-off point

Product X = $38,000 - $20,000

= $18,000

Financial advantage = Increase in sales from further processing - Costs of further processing

= $18,000 - $24,300

= ($6,300)

b. Increase in sales from further processing = Sales value after further processing - Sales value at split-off point

Product Y = $58,500 - $30,000

= $28,500

Financial advantage = Increase in sales from further processing - Costs of further processing

= $28,500 - $18,600

= $9,900

c. Minimum acceptable amount = Allocated joint processing costs

Product X = $18,400

d. Minimum acceptable amount = Allocated joint processing costs

Product Y = $27,600

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