Dowchow Corporation Makes Two Products from a Common Input

question 157

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 Y beyond the split-off point?

• A)$3,500
• B)$7,900
• C)$29,900
• D)$25,500

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Definitions:

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