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Business, 29.05.2020 09:59 kennyg02

Gusler company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:

Product Selling Price Quarterly Output
A $ 4 per pound 10,000 pounds
B $ 6 per pound 22,000 pounds
C $ 12 per gallon 5,000 gallons

Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below:

Product Additional Processing Costs Selling Price
A. $ 53,000 $ 6 per pound
B. $ 38,000 $ 13 per pound
C $ 18.000 $ 19 per gallon

Which products should be processed further?

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