Two Products,IF and RI,emerge from a Joint Process

question 7

Multiple Choice

Two products,IF and RI,emerge from a joint process.Product IF has been allocated $25,300 of the total joint costs of $46,000.A total of 2,000 units of product IF are produced from the joint process.Product IF can be sold at the split-off point for $11 per unit,or it can be processed further for an additional total cost of $10,000 and then sold for $13 per unit.If product IF is processed further and sold,what would be the effect on the overall profit of the company compared with sale in its unprocessed form directly after the split-off point?

• A)$31,300 less profit
• B)$6,000 less profit
• C)$16,000 more profit
• D)$19,300 more profit

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The total cost accrued in making products completed during an accounting period, including labor, material, and overhead costs.

Statement of Cost

A financial report that details the costs associated with producing goods, often used in manufacturing to assess production expenses.

Raw Material Inventory

Items and inventory that are used in the manufacturing process to create products but have not yet been converted into finished goods.