FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Sheridan Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint
products: Sarco, Barco, and Larco. Each of these products can be sold as is, or they can be processed further and sold for a higher price.
The company incurs joint costs of $177,000 to process one batch of the raw material that produces the three joint products. The
following cost and selling price information is available for one batch of each product:
Sarco
Barco
Larco
Sarco
Barco
Selling Price at
Split-Off Point
Larco
$198,000
299,000
401,000
Allocated
Joint Costs
Incremental
Profit/Loss
$39,000
59,000
79,000
Cost to
Process Further
$
$96,000
Determine whether each of the three joint products should be sold as is, or processed further. (Enter loss with a negative sign preceding
the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
Amount
88,000
249,000
Selling Price of
Processed Product
$299,000
360,000
799,000
Decision
>
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Transcribed Image Text:Sheridan Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Sarco, Barco, and Larco. Each of these products can be sold as is, or they can be processed further and sold for a higher price. The company incurs joint costs of $177,000 to process one batch of the raw material that produces the three joint products. The following cost and selling price information is available for one batch of each product: Sarco Barco Larco Sarco Barco Selling Price at Split-Off Point Larco $198,000 299,000 401,000 Allocated Joint Costs Incremental Profit/Loss $39,000 59,000 79,000 Cost to Process Further $ $96,000 Determine whether each of the three joint products should be sold as is, or processed further. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Amount 88,000 249,000 Selling Price of Processed Product $299,000 360,000 799,000 Decision >
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