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.

---

Definitions:

Best Interests

Actions or decisions that are considered most beneficial to the well-being or success of an individual or group.

Socially Responsible

Acting with consideration for the ethical, environmental, and community implications of one's actions, often linked to sustainable business practices.

Engage In Philanthropy

The act of donating time, resources, or money to charitable causes in order to contribute to the welfare of others.

Ethical Organization

An organization characterized by ethical practices, where ethical principles guide its decision making, relationships, and conduct towards employees, customers, and society.