Question

Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $178,600 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product.

		Sales Value at Split-Off Point			Allocated Joint Costs			Cost to Process Further			Sales Value of Processed Product
Spock			$209,500			$39,200			$110,100			$300,900
Uhura			299,900			59,100			85,100			400,900
Sulu			454,000			80,300			249,500			800,700

Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Spock		Uhura		Sulu
Incremental profit (loss)		$		$		$

Indicate whether each of the three joint products should be sold as is, or processed further.

Spock		process furthersold as is
Uhura		process furthersold as is
Sulu		process furthersold as is

Answer 1

Answer-

	Spock	Uhura	Sulu
Incremental Profit (Loss)	($18700)	$15900	$97200

Explanation-

Kirk Minerals
Statement Of Incremental Profit/(loss)
Product	Sale value at Split-Off-Point	Sale value of processed product	Incremental sale	Cost to further process	Incremental profit/(loss)
	$	$	$	$	$
	(a)	(b)	(c=b-a)	(d)	(e=c-d)
Spock	209500	300900	91400	110100	-18700
Uhura	299900	400900	101000	85100	15900
Sulu	454000	800700	346700	249500	97200

Answer- Spock = Sold as is

Uhuru= Process further

Sulu = Process further