A company manufactures three products using the same production process. The costs incurred up to the split-off point are $208,400. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows.Product Number ofUnits ProducedSelling Priceat Split-OffSelling Priceafter ProcessingAdditionalProcessing Costs D 4,470 $10.20 $15.10 $15,823 E 5,500 11.60 16.60 19,800 F 1,710 19.70 22.80 8,401 (b1)Determine the incremental profit (loss) of each product(s).Product D Product E Product F Incremental profit (loss) $ $ $ (b2)Which product(s) should be processed further and which should be sold at the split-off point?Product D Product E Product F

Formula: Incremental profit = ( Units x Selling price after processing ) - ( Units x selling price…

Answered: A company manufactures three products…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

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

Section: Chapter Questions

Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...

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A company manufactures three products using the same production process. The costs incurred up to the split-off point are $208,400. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows.

Product	Number of Units Produced	Selling Price at Split-Off	Selling Price after Processing	Additional Processing Costs
D		4,470			$10.20	$15.10	$15,823
E		5,500			11.60	16.60	19,800
F		1,710			19.70	22.80	8,401

(b1)

Determine the incremental profit (loss) of each product(s).

Product D		Product E		Product F
Incremental profit (loss)		$		$		$

(b2)

Which product(s) should be processed further and which should be sold at the split-off point?

Product D
Product E
Product F

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