loader  Loading... Please wait...

Question(s) / Instruction(s):

135.      Faulk Company has a joint process which produces three products, AA, BB, and CC. Each product may be sold at split off or processed further and then sold. Joint processing costs for a year amount to $30,000. Other relevant data are as follows:

Separable

 

 

 

 

Processing

 

 

 

Sales Value

Costs after

Sales Value

 

 

Product

at Split off

Split off

at Completion

 

 

AA

$15,500

$2,200

$17,700

 

 

BB

18,000

8,000

23,000

 

 

CC

24,000

11,500

37,500

Required:

     a.     What will be the effect on profits of processing each product further?
     
     b.     Assume the company maximizes profits, what is Faulk Company’s      operating income?

     
LEARNING OBJECTIVE 3

136.      Bryant Corporation uses a joint process to produce products A, B, and C. Each
     product may be sold at split off or processed further and then sold. Joint processing costs for the year amounted to $100,000. Other information is presented below:

Separable

 

 

 

 

Processing

 

 

 

Sales Value

Costs after

Sales Value

 

 

Product

at Split off

Split off

at Completion

 

 

A

 

$94,000

$28,000

$116,000

 

 

B

 

60,000

8,000

82,000

 

 

C

 

66,000

14,000

80,000

Required:

     a.     Which products, if any, should be processed further?

     b.     If all three products were processed further, what would be the effect on profits?

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$2.50

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494