E7-11 Chen Minerals
processes materials extracted from mines. The most common raw material that it
processes results in three joint products: Spock, Uhura, and Sulu. Each of
these products can be sold as is, or each can be processed further and sold for
a higher price. The company incurs joint costs of $180,000 to process one batch
of the raw material that produces the three joint products. The following cost
and sales information is available for one batch of each product.
|
|
Sales Value at
Split-Off Point
|
Allocated
Joint Costs
|
Cost to Process
Further
|
Sales Value of
Processed Product
|
|
Spock
|
$200,000
|
$40,000
|
$110,000
|
$300,000
|
|
Uhura
|
300,000
|
60,000
|
85,000
|
400,000
|
|
Sulu
|
455,000
|
80,000
|
250,000
|
800,000
|
Instructions
Determine whether each of the three joint products should be sold as is, or processed further.
Determine whether each of the three joint products should be sold as is, or processed further.
To determine whether each of the three joint products should be sold as is, or processed
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