Benjamin Signal Company Produces Products R,J,and C from a Joint

question 114

Essay

Benjamin Signal Company produces products R,J,and C from a joint production process.Each product may be sold at the split-off point or be processed further.Joint production costs of $92,000 per year are allocated to the products based on the relative number of units produced.Data for Benjamin's operations for the current year are as follows:

$\begin{array}{lccc}\text { Product } & \begin{array} { l } \text { Units } \\\text { Produced }\end{array} & \begin{array} { l } \text { Allocated Joint } \\\text { Production Cost }\end{array} & \begin{array} { c } \text { Sales Value } \\\text { at Split-off }\end{array} \\\hline \mathrm { R } & 8,000 & \$ 32,000 & \$ 76,000 \\\mathrm {~J} & 10,000 & 40,000 & 71,000 \\\mathrm { C } & 5,000 & 20,000 & 48,000\end{array}$

Product R can be processed beyond the split-off point for an additional cost of $26,000 and can then be sold for $105,000. Product J can be processed beyond the split-off point for an additional cost of $38,000 and can then be sold for $117,000. Product C can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $57,000.

Required:

Which products should be processed beyond the split-off point?

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Definitions:

Nations

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Physical Capital

Tangible assets used in the production of goods and services, such as machinery and buildings.

Economic Sense

The logic or rationale behind economic decisions or policies, often evaluated in terms of benefits versus costs.

Progressed

Advanced or moved forward in development or improvement.