Prosner Corp

question 155

Essay

Prosner Corp.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? Show computations.

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