Dock Corporation Makes Two Products from a Common Input

question 59

Multiple Choice

Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: What is the financial advantage (disadvantage) for the company of processing Product Y beyond the split-off point?

• A) $9,600
• B) $2,400
• C) $33,600
• D) $26,400

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