Prosner Corporation Manufactures Three Products from a Common Input in a Joint

question 190

Essay

Prosner Corporation manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $500,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point.Each product may be sold at the split-off point or processed further. The additional processing costs and sales value after further processing for each product (on an annual basis) are:
Required: Which product or products should be sold at the split-off point, and which product or products should be processed further?

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Definitions:

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