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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $51,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Allocated joint processing costs. Sales value at split-off point Costs of further processing Sales value after further processing Product X $ 20,400 $ 20,000 $ 23,300 $ 38,800 a. Financial disadvantage b. Financial advantage c. Minimum acceptable amount d. Minimum acceptable amount Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? Answer is complete but not entirely correct. ✓ $ $ $ $ (4,500) Product Y $ 30,600 $ 30,000 $ 17,600 $ 56,500 8,900✔ 20,400 X 30,600 X Total $ 51,000 $ 50,000 $ 40,900 $ 95,300

Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $51,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Allocated joint processing costs. Sales value at split-off point Costs of further processing Sales value after further processing Product X $ 20,400 $ 20,000 $ 23,300 $ 38,800 a. Financial disadvantage b. Financial advantage c. Minimum acceptable amount d. Minimum acceptable amount Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? Answer is complete but not entirely correct. ✓ $ $ $ $ (4,500) Product Y $ 30,600 $ 30,000 $ 17,600 $ 56,500 8,900✔ 20,400 X 30,600 X Total $ 51,000 $ 50,000 $ 40,900 $ 95,300

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 13P: Venezuela Oil Inc. transports crude oil to its refinery where it is processed into main products...
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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $51,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Allocated joint processing costs Sales value at split-off point Costs of further processing Sales value after further processing Product X $ 20,400 $ 20,000 $ 23,300 $ 38,800 > Answer is complete but not entirely correct. a. Financial disadvantage b. Financial advantage c. Minimum acceptable amount d. Minimum acceptable amount Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? $ $ $ $ Product Y $ 30,600 $ 30,000 $ 17,600 $ 56,500 (4,500) 8,900 20,400 X 30,600 Total $ 51,000 $ 50,000 $ 40,900 $ 95,300
Transcribed Image Text:Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $51,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Allocated joint processing costs Sales value at split-off point Costs of further processing Sales value after further processing Product X $ 20,400 $ 20,000 $ 23,300 $ 38,800 > Answer is complete but not entirely correct. a. Financial disadvantage b. Financial advantage c. Minimum acceptable amount d. Minimum acceptable amount Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? $ $ $ $ Product Y $ 30,600 $ 30,000 $ 17,600 $ 56,500 (4,500) 8,900 20,400 X 30,600 Total $ 51,000 $ 50,000 $ 40,900 $ 95,300
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