Prosner Corp.manufactures three products from a common input in a joint processing operation.Joint processing costs up to the split-off point total $500,000 per year.The company allocates these costs to the joint products on the basis of their total sales value at the split-off point.
Each product may be sold at the split-off point or processed further.The additional processing costs and sales value after further processing for each product (on an annual basis)are: Required:
Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.

Question

Prosner Corp.manufactures three products from a common input in a joint processing operation.Joint processing costs up to the split-off point total $500,000 per year.The company allocates these costs to the joint products on the basis of their total sales value at the split-off point.
Each product may be sold at the split-off point or processed further.The additional processing costs and sales value after further processing for each product (on an annual basis)are:

Required:
Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.

Abiraj Kanagaratnam · Accepted Answer

Final Answer :   Products D and G should be sold after further processing beyond the split-off point.Product F should be sold at the split-off point without any further processing.

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