Dowchow Company Makes Two Products from a Common Input $\$ 38,400$

question 3

Multiple Choice

Dowchow Company makes two products from a common input. Joint processing costs up to the split-off point total $\$ 38,400$ a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

$\begin{array}{|l|r|r|r|}\hline & \text { Product X } & \text { Product Y } & \text { Total } \\\hline \text { Allocated Joint Processing Costs } & 20,800 & 17,600 & 38,400 \\\hline \text { Sales Value at Split-Off Point } & 26,000 & 22,000 & 48,000 \\\hline \text { Costs of Further Processing } & 22,600 & 20,400 & 43,000 \\\hline \text { Sales Value after Further Processing } & 45,000 & 45,900 & 90,900 \\\hline\end{array}$
-What is the net monetary advantage of processing Product Y beyond the split-off point?

• A) $3,500.
• B) $7,900.
• C) $25,500.
• D) $29,900.

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Definitions:

Organizational Communication

The study and implementation of communication strategies within organizations to improve efficiency and morale.

Internal Perspective

A focus on factors within an organization, such as policies and employee attitudes, that impact its operations.

Work Load

The amount of work assigned to or expected from an individual or team within a specified time frame.

Internal Perspective

The viewpoint focusing on internal factors and operations within an organization that influence its performance and decision-making.