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Davidian Company Uses a Joint Process to Produce Products W

question 51

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Davidian Company uses a joint process to produce products W, X, Y, and Z. Each product may be sold at its split-off point or processed further. Additional processing costs of specific products are entirely variable. Joint processing costs for a single batch of joint products are $120,000. Other relevant data are as follows:  Product  Sales Value  at Split-Off  Additional  Processing Costs  Sales Value of  Final Froduct W$40,000$60,000$80,000X$12,000$4,000$20,000Y$20,000$32,000$120,000Z$28,000$20,000$32,000$100,000$116,000$252,000\begin{array} { r r r } \text { Product }&\begin{array} { c } \text { Sales Value } \\\text { at Split-Off }\end{array} & \begin{array} { r } \text { Additional } \\\text { Processing Costs }\end{array} & \begin{array} { r } \text { Sales Value of } \\\text { Final Froduct }\end{array} \\\hline W&\$ 40,000 & \$ 60,000 & \$ 80,000 \\X&\$ 12,000 & \$ 4,000 & \$ 20,000 \\Y&\$ 20,000 & \$ 32,000 & \$ 120,000 \\Z&\$ 28,000 & \$ 20,000 & \$ 32,000 \\&\$ 100,000 & \$ 116,000 & \$ 252,000\end{array} Which products should Davidian process further?


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