WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows:
Product X Product Y Product Z
Units produced 1,600 2,100 3,100
Per unit sales value at split-off $ 14.00 $ 19.00 $ 16.00
Added processing costs per unit $ 5.00 $ 7.00 $ 7.00
Per unit sales value if processed further $ 20.00 $ 20.00 $ 25.00
The cost of the joint raw material input is $69,000. Which of the products should be processed beyond the split-off point?
Product X Product Y Product Z
A) yes yes no
B) yes no yes
C) no yes no
D) no yes yes
Multiple Choice
Choice A
Choice B
Choice C
Choice D
