Dowchow Corporation Makes Two Products from a Common Input

question 121

Multiple Choice

Dowchow Corporation 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: What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

• A)$1, 600
• B)$22, 400
• C)$27, 600
• D)$(3, 600)

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