Calaveras Makes Two Products in a Joint Manufacturing Process

question 81

Essay

Calaveras makes two products in a joint manufacturing process. At the point of separation, costs of $8,000 have been incurred. Each product can be sold at the point of separation or processed further. At the split-off point, Product 1 can be sold for $20,000 and Product 2 can be sold for $36,000. Product 1 can be further processed at a cost of $24,000 to make Product 1a which could be sold for $60,000. Product 2 can be further processed at a cost of $28,000 to make Product 2b which could be sold for $56,000.