2. Nando Company manufactures 3 products, A, B, and C, by the same production process which costs $100,000. Each product could be sold at split off or processed further and sold at a higher price.product Selling Price at Split OffSelling Price After ProcessedAdditional Processing CostsA$60000$190000$100000B$15000$35000$30000C$55000$215000$150000a. Determine the total net income if all products are sold at the split off point. b. Determine the total net income if all products are sold after further processing. c. Which product should be processed further and which product should not? Provide the incremental analysis for your answer.

Net Income is the excess of total revenue over total expenses. Total expenses include cost of goods…

Answered: 2. Nando Company manufactures 3…

Cornerstones of Cost Management (Cornerstones Series)

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ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

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2. Nando Company manufactures 3 products, A, B, and C, by the same production process which costs $100,000. Each product could be sold at split off or processed further and sold at a higher price.

product	Selling Price at Split Off	Selling Price After Processed	Additional Processing Costs
A	$60000	$190000	$100000
B	$15000	$35000	$30000
C	$55000	$215000	$150000

a. Determine the total net income if all products are sold at the split off point.

b. Determine the total net income if all products are sold after further processing.

c. Which product should be processed further and which product should not? Provide the incremental analysis for your answer.

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