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Split-Off Point
Process Further
Processed
Allocated Joint Costs Cost to
Product
Spock
$300,000 $210,000 $40,000 $110,000
Uhura
400,000 300,000 60,000 85,000
80,000 250,000
Sulu
800,000
455,000
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 industrial-
cleaner 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