Canning Company Uses a Joint Process to Produce Products W,X,Y,and

question 11

Multiple Choice

Canning Company uses a joint process to produce products W,X,Y,and Z.Each product may be sold at its split-off point or processed further.Additional processing costs of specific products are entirely variable.Joint processing costs for a single batch of joint products are $120,000.Other relevant data are as follows: Which of the following actions should be taken by Canning?
$\begin{array}{lll}& \text { Sales Value } & \text { Additional } & \text { Sales Value of } \\\text { Product } & \text { at Split-Off } & \text { Processing Costs } & \text { Final Product }\\W&\$ 40,000 & \$ 60,000 & \$ 80,000 \\X&\$12,000 & \$ 4,000 & \$ 20,000 \\Y&\$ 20,000 & \$ 32,000 & \$ 120,000 \\Z& \$ 28,000 & \$ 20,000 & \$ 32,000 \\&\$ 100,000 & \$ 116,000 & \$ 252,000\end{array}$

• A)Process W further.
• B)Sell X now.
• C)Process Y further.
• D)Process Z further.

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Definitions:

Divergent Thinking

A cognitive process used to generate creative ideas by exploring many possible solutions.

Decision Structure

The framework or methods used by organizations or individuals to make and implement decisions.

Employee Involvement

A workplace strategy that allows employees to participate in decision-making processes and contribute to problem-solving relevant to their work.

Nonprogrammed Decision

Decision-making that occurs in situations that are unique, poorly defined and largely unstructured, requiring custom solutions.