Grape Company Produces Three Products Using a Joint Process Which

question 76

Multiple Choice

Grape Company produces three products using a joint process which accumulates $25,000 in joint costs. The products, A, B, and C, can be sold at split- off or processed further and then sold. The production level for each product is 10,000 units. The following unit information is also available: $\begin{array}{llll}&&\text { Separable }\\&&\text { Processing }\\& \text { Sales V alue at } & \text { Costs after } & \text { Sales Value at } \\\text { Product } & \text { Split- off } & \underline{\text { Split-off }} & \text { Completion }\\\mathrm{A} & \$ 12 & \$ 9 & \$ 21 \\\mathrm{~B} & 10 & 4 & 17 \\\mathrm{C} & 15 & 6 & 19\end{array}$ Product C should be processed beyond the split- off point because:

• A) incremental revenues will exceed incremental costs
• B) sales value at completion exceeds sales value at split- off
• C) incremental costs exceed incremental revenue
• D) None of these answers is correct.