Question

Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $182,100 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product.

		Sales Value at Split-Off Point			Allocated Joint Costs			Cost to Process Further			Sales Value of Processed Product
Spock			$209,600			$40,200			$109,700			$300,900
Uhura			299,800			60,900			84,700			400,600
Sulu			455,800			81,000			250,200			799,600

Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Spock		Uhura		Sulu
Incremental profit (loss)		$		$		$

Indicate whether each of the three joint products should be sold as is, or processed further.

Spock		sold as isprocess further
Uhura		sold as isprocess further
Sulu		sold as isprocess further

Answer 1

Answer-

	Spock	Uhura	Sulu
	$	$	$
Incremental Profit (Loss)	-18400	16100	93600

Explanation-

Kirk Minerals
Statement Of Incremental Profit/(loss)
Product	Sale value at Split-Off-Point	Sale value of processed product	Incremental sale	Cost to further process	Incremental profit/(loss)
	$	$	$	$	$
	(a)	(b)	(c=b-a)	(d)	(e=c-d)
Spock	209600	300900	91300	109700	-18400
Uhura	299800	400600	100800	84700	16100
Sulu	455800	799600	343800	250200	93600

Spock = Sold as is.

Uhura= Processed further

Sulu = Processed further