E7-11 Chen Minerals processes materials extracted from mines. The most common raw
accounting teacherE7-11 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.
11 years ago
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