Bowen Company makes two products from a joint production process. Each product may be sold at...

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Bowen Company makes two products from a joint production process. Each product may be sold at...

Bowen Company makes two products from a joint production process. Each
product may be sold at the split-off point or processed further and then
sold. Information concerning these products for last year is given below:

                                              Product X      Product Y
Allocated joint costs ....................     $25,000        $19,000
Sales value after further processing .....     $41,000        $47,000
Sales value at the split-off point .......     $28,000        $23,000
Additional processing costs ..............     $16,000        $19,000

Assume that Bowen Company makes all the correct sell or process further
decisions.

Calculate the net income reported by Bowen Company last year.

business accounting

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Answer 1

Answer #1

Net Income is $12,000
Particulars	Product X	Product Y
Sales value after further processing	41,000.00	47,000.00
Sales value at split off point	28,000.00	23,000.00
Total Incremental Revenue	13,000.00	24,000.00
Total Incremental Processing costs	16,000.00	19,000.00
Total Incremental profit or loss	(3,000.00)	5,000.00
	Sold at split off	Process Further

	Product X	Product Y	Total
Sales Revenue - X at split off, Y after further processing	28,000.00	47,000.00
Joint costs	25,000.00	19,000.00
Incremental Processing costs		19,000.00
Income	3,000.00	9,000.00	12,000.00

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Answer 2

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