Phoenix Corporation Has a Joint Process That Produces Three Products

question 91

Multiple Choice

Phoenix Corporation has a joint process that produces three products: X, Y, and Z.Each product may be sold at split-off or processed further and then sold.Joint- processing costs for a year amount to $100,000.Other relevant data are as follows: $\begin{array}{rlc} && \text { Separable } & \\&& \text { Processing } & \\&\text { Sales Value } & \text { Costs after } & \text { Sales Value } \\\text { Product } & \text {at Split-off } & \text { Split-off } & \text { at Completion }\\\mathrm{X} & \$ 128,000 & \$ 16,000 & \$ 160,000 \\\mathrm{Y} & 50,000 & 26,000 & 76,000 \\\mathrm{Z} & 25,600 & 20,000 & 40,000\end{array}$ Product Y _____.

• A)should be processed further to increase profits by $26,000
• B)should be sold at split?off since processing further would only reduce profits by $26,000
• C)should be processed further to increase profits by $76,000
• D)can be processed further or sold at split?off; there is no difference in profit

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