Test Company produces two products from a common input: Product A and Product B. One batch of the common input yields 600 units of Product A and 200 units of Product B. The joint costs for one batch are $25,000. Product A can be sold at the split-off point for $80 per unit. Product B can be sold at the split-off point for $150 per unit. Alternatively, Product B can be processed into 120 units of Product C that will sell for $400 per unit. Additional process costs for one batch of Product C will be $5,500 Determine the increase (decrease) in income if Product B is processed further into Product C. Note: Give your answer using dollar signs and commas but not decimal points (cents) Give negative numbers in parentheses Example: $12,345 or $(12,345)
Test Company produces two products from a common input: Product A and Product B. One batch of the common input yields 600 units of Product A and 200 units of Product B. The joint costs for one batch are $25,000. Product A can be sold at the split-off point for $80 per unit. Product B can be sold at the split-off point for $150 per unit. Alternatively, Product B can be processed into 120 units of Product C that will sell for $400 per unit. Additional process costs for one batch of Product C will be $5,500 Determine the increase (decrease) in income if Product B is processed further into Product C. Note: Give your answer using dollar signs and commas but not decimal points (cents) Give negative numbers in parentheses Example: $12,345 or $(12,345)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 4BE: Blakes Blacksmith Co. produces two types of shotguns, a 12-gauge and 20-gauge. The shotguns are made...
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