Stars Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000. If Processed Further UnitsSales ValueAdditionalSalesProductProducedat Split-OffCostsValueA13,000$10,000$2,500$15,000B25,00030,0003,00035,000C34,00020,0004,00025,000D46,00040,0006,00045,000 If Product B2 is processed further, profits will increase by $30,000. decrease by $3,000. increase by $32,000. increase by $2,000.

Joint cost is sunk cost and not considered in decision making. Given, Sales value at split off-…

Answered: Stars Manufacturing Company produces…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 10PA: Clarion Industries produces two joint products, Y and Z. Prior to the split-off point, the company...

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Stars Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000.

			If Processed Further
	Units	Sales Value	Additional	Sales
Product	Produced	at Split-Off	Costs	Value
A1	3,000	$10,000	$2,500	$15,000
B2	5,000	30,000	3,000	35,000
C3	4,000	20,000	4,000	25,000
D4	6,000	40,000	6,000	45,000

If Product B2 is processed further, profits will

		increase by $30,000.
		decrease by $3,000.
		increase by $32,000.
		increase by $2,000.

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