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 $180,100 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			$210,800			$39,700			$110,900			$299,100
Uhura			301,000			59,800			85,200			399,100
Sulu			454,400			80,600			250,800			799,800

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		sold as is or process further?
Uhura		sold as is or process further?
Sulu		sold as is or process further?

Answer 1

	$	$	$	$	$
	Sales at split-off point	Allocated Joint Cost	Profit at Split-off point	Cost to process further	Sales value of processed product	Profit after further processing	Incremental Profit or loss
	$	$	$	$	$	$	$
Spock	210,800	39,700	171,100	110,900	299,100	148,500	- 22,600
Uhura	301,000	59,800	241,200	85,200	399,100	254,100	12,900
Sulu	454,400	80,600	373,800	250,800	799,800	468,400	94,600
Total		180,100	786,100			871,000
Spock	Sold as is
Uhura	Process further
Sulu	Process further