Question

Manning Company uses a joint process to produce Products W, X, Y, and Z. Each product may be sold at its split-off point or processed further. Additional processing costs of specific products are entirely variable. Joint processing costs for a single batch of joint products are $120,000. Other relevant data are as follows: Product Sales Value at Split-Off Additional Processing Costs Sales Value of Final Product W $ 40,000 $ 60,000 $ 80,000 X 12,000 4,000 20,000 BY 20,000 32,000 120,000 Z 28,000 20,000 32,000 $100,000 $116,000 $252,000 Which products should Manning process further

Answer 1

Answer:

Y and X

Explanation:      

Product  Additional   Additional Costs   Difference   Decision                    Revenues                                                        

W            40000            60000               -20000        Sell Now    

X            8000                4000                4000        Process On    

Y           100000                32000        68000   Process On    

Z           4000                    20000       -16000          Sell Now