Bowen Company makes two products from a joint production process. Each product may be sold at the split-off point or processed further. Information concerning these products appears below: Product X Product Y Allocated joint costs .................... $25,000 $18,000 Sales value after further processing ..... $47,000 $41,000 Sales value at the split-off point ....... $28,000 $23,000 Additional processing costs .............. $16,000 $17,000 Assume Bowen chooses to process Product X further and then sell it rather than sell Product X at the split-off point. Calculate the amount of the increase in company profits due to this decision.
Calculate incremental profit of Product X
Product X | |
Sales value after further processing | 47000 |
Sales value at split off | 28000 |
Incremental revenue | 19000 |
Incremental cost | -16000 |
Incremental profit (loss) | 3000 |
Increase in Company's profit = $3000
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...
I'm not sure with my answer. 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: Allocated joint costs .. Sales value after further processing Sales value at the split-off point Additional processing costs Product X $25,000 $41,000 $28,000 $16,000 Product Y $19,000 $47,000 $23,000 $19,000 Assume that Bowen Company makes all the correct sell...
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