Iaci Company Makes Two Products from a Common Input Required:
A)What Is the Net Monetary Advantage (Disadvantage)of Processing Product

question 117

Essay

Iaci Company makes two products from a common input.Joint processing costs up to the split-off point total $42,000 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:
$\begin{array}{|l|r|r|r|}\hline & \text { Product X } & \text { Product Y } & \text { Total } \\\hline \text { Allocated Joint processing costs } & \$ 22,000 & \$ 19,600 & \$ 42,000 \\\hline \text { Sales value at split-off point } & \$ 32,000 & \$ 28,000 & \$ 60,000 \\\hline \text { Costs of further processing } & \$ 11,600 & \$ 25,300 & \$ 36,900 \\\hline \text { Sales value after further processing } & \$ 40,800 & \$ 54,200 & \$ 95,000 \\\hline\end{array}$
Required:
a)What is the net monetary advantage (disadvantage)of processing Product X beyond the split-off point?
b)What is the net monetary advantage (disadvantage)of processing Product Y beyond the split-off point?
c)What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?
d)What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

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Definitions:

Iris

The colored part of the eye that controls the size of the pupil and the amount of light that enters the eye.

Muscles

Tissues in the body that have the ability to contract, enabling movement of the body and maintenance of posture.

Complexity

A characteristic of systems, models, or problems that have multiple interconnected parts and variables, which make understanding or solving them challenging.

Perception

The process by which organisms interpret and organize sensory information to produce a meaningful experience of the world.