Question

CALCULATOR PRINTER VERSION RACK Exercise 20-11 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 $170,700 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 Spock Uhura Sulu Sales Value at Split-off Point $209,600 300,400 455,400 Allocated Joint Costs $39,400 59,700 79,600 Cost to Process Further $109,000 85,200 250,200 Sales Value of Processed Product $299,700 400,500 799,700 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).) Spock Sulu Incremental profit (loss) Uhura Indicate whether each of the three joint products should be sold as is, or processed further Spock Uhura

Answer 1

Kirk Minerals Incremental Revenue Sales Value Processed Less:Sales Value at Split off Incremental Revenue Incremental Cost Incremental Profit/ (Loss) Spock 299700 209600 90100 -109000 -18900 Uhura Sulu 400500 799700 300400 455400 100100344300 -85200 -250200 14900 94100 Decision Sell the negative results group (Spock)