Stahl
Inc. produces three separate products from a common process costing $100,000 Each
of the products can be sold at the split-off point or can be processed further
E7-10 Stahl Inc. produces three separate products from a common process costing $100,000 Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period.
Instructions
(a) Determine total net income if all products are sold at the split-off point.
(b) Determine total net income if all products are sold after further processing.
(c) Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further.
(d) Determine total net income using the results from (c) and explain why the net income is different from that determined in (b).
TUTORIAL PREVIEW
(a) Determine total net income if all products are sold at the split-off point.
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Sales =
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$60,000
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+
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$15,000
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+
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$55,000
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=
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$130,000
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Joint costs =
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-100,000
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