Question

Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and...

Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $78,000 per ton, one-fourth of which is allocated to product X15. Eight thousand four hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $10 each, or processed further at a total cost of $6,000 and then sold for $13 each.

Required:

1. What is the financial advantage (disadvantage) of further processing product X15?

2. Should product X15 be processed further or sold at the split-off point?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : Calculation of Fiancial advantage and Disadvantage of Further Processing :

Below is the table showing Net Income under both cases :

Sale at Split off Sale after further processing
Sales 84000 (8400 * 10) 109200 (8400 * 13)
Less : Processing cost 19500 (78000 * 1/4) 19500 (78000 * 1/4)
Less : Further Processing Cost - 6000
Net Income 64500 83700

Therefor there is financial advantage of 19200 (83700 - 64500) for further processing.

2.) The units should be further processed as there is financial advantage.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and...
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $66,000 per ton, one-fourth of which is allocated to product X15. Seven thousand four hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $18 each, or processed further at a total cost of $9,500 and then sold for $23 each. Required: 1. What is the financial advantage...
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and...
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $71,000 per ton, one-fourth of which is allocated to product X15. Six thousand five hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $8,800 and then sold for $22 each. Required: 1. What is the financial advantage...
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and...
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $54,000 per ton, one-fourth of which is allocated to product X15. Six thousand three hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $8,700 and then sold for $20 each. Required: 1. What is the financial advantage...
Exercise 12-13 Sell or Process Further Decision [LO12-7] Wexpro, Inc., produces several products from processing 1...
Exercise 12-13 Sell or Process Further Decision [LO12-7] Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15. Seven thousand units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $9 each, or processed further at a total cost of $9,500 and then sold for $12 each. Required:...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $305,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 11.00 per pound 11,200 pounds B $ 5.00 per...
bsen Company makes two products from a common input. Joint processing costs up to the split-off...
bsen Company makes two products from a common input. Joint processing costs up to the split-off point total $46,000 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: Product X Product Y Total Allocated joint processing costs $ 18,400 $ 27,600 $ 46,000 Sales value at split-off point...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $43,000 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: Product X Product Y Total Allocated joint processing costs $ 25,800 $ 17,200 $ 43,000 Sales value at split-off point...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $49,700 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: Product X Product Y Total Allocated joint processing costs $ 19,300 $ 30,400 $ 49,700 Sales value at split-off point...
Joint Joinery makes two products from a common input. Joint processing costs up to the split-off...
Joint Joinery makes two products from a common input. Joint processing costs up to the split-off point total $49,600 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: Dados Dovetails Total Allocated joint processing costs $ 19,200 $ 30,400 $ 49,600 Sales value at split-off point $ 24,000...
Product X and Y are made from a common input. Joint processing costs up to the...
Product X and Y are made from a common input. Joint processing costs up to the split-off point total $46,400 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: Product X Product Y Total Allocated joint processing costs $ 18,200 $ 28,200 $ 46,400 Sales value at split-off...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT