6.2k views
3 votes
WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows: Product X Product Y Product Z Units produced 1,600 2,100 3,100 Per unit sales value at split-off $ 14.00 $ 19.00 $ 16.00 Added processing costs per unit $ 5.00 $ 7.00 $ 7.00 Per unit sales value if processed further $ 20.00 $ 20.00 $ 25.00 The cost of the joint raw material input is $69,000. Which of the products should be processed beyond the split-off point? Product X Product Y Product Z A) yes yes no B) yes no yes C) no yes no D) no yes yes

User LiavK
by
8.0k points

1 Answer

3 votes

Answer:

B) yes no yes

Step-by-step explanation:

The preparation is shown below:

Particulars Product X Product Y Product Z

Units produced 1,600 2,100 3,100

Sales Value at split off per unit $14 $19 $16

Total Sales Value at split off (a) $22,400 $39,900 $49,600

Units produced 1,600 2,100 3,100 (X)

Sales Value per unit $20 $20 $25

Additional Processing cost per unit $5 $7 $7

Net Realizable Value = Sales value - Further costs $15 $13 $18 (y)

Total Realizable Value if processed further (b) $24,000 $27,300 $55,800 (x × Y)

Difference = b- a $1,600 -$12,600 $6,200

Processed further Yes No Yes

As the product X and product Z contains positive number so it should be processed and Product Y should not be processed as it contains negative number

User Kqr
by
8.2k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.