Split-Off Point Allocated Joint Costs Cost to Process Further Processed
Product
Spock |
$ 210,000 |
$ 40,000 |
$ 110,000 |
$ 300,000 |
|
|
|
Uhura |
300,000 |
60,000 |
85,000 |
400,000 |
|
|
|
Sulu |
455,000 |
80,000 |
250,000 |
800,000 |
|
|
|
Instructions
a. Determine whether each of the three joint products should be sold as is, or processed further.
P7-3A
Thompson Industrial Products Inc.( TIPI) is a diversified industrialcleaner processing company. The company ' s Dargan plant produces two products: a table cleaner and a floor cleaner from a common set of chemical inputs( CDG). Each week, 900,000 ounces of chemical input are processed at a cost of $ 210,000 into 600,000 ounces of floor cleaner and 300,000 ounces of table cleaner. The floor cleaner has no market value until it is converted into a polish with the trade name Floor Shine. The additional processing costs for this conversion amount to $ 240,000.
Floor Shine sells at $ 20 per 30-ounce bottle. The table cleaner can be sold for $ 17 per 25-ounce bottle. However, the table cleaner can be