A company puts four products through a common production process. This process costs $100,000 each year. The four products can be sold when they emerge from this process at the "split-off point," or processed further and then sold. Data about the four products for the coming period are: ??Unit SalesUnit Sales???Price perPrice per???unit atunit afterAdditional??Split-OffFurtherProcessingProductVolumePointProcessingCosts Stroller20,000 lb.$28.00$42.00$400,000 Walker10,000 lb.7.0028.00144,000 Jogger5,000 lb.36.0058.00120,000 Runner5,000 lb.18.0022.0040,000Determine which products should be sold at the split-off point and which should be processed further.
What will be an ideal response?
? | Stroller | Walker | Jogger | Runner |
| Sales value after further processing* | $840,000 | $280,000 | $290,000 | $110,000 |
| Sales value at split off point** | (560,000) | (70,000) | (180,000) | (90,000) |
| Incremental revenue from further processing | $280,000 | $210,000 | $110,000 | $ 20,000 |
| Incremental costs to process | (400,000) | (144,000) | (120,000) | (40,000) |
| Incremental profit (loss) from further processing | $(120,000) | $ 66,000 | $(10,000) | $ (20,000) |
| Decision: | Sell at | Process | Sell at | Sell at |
| ? | split-off | further | split-off | split-off |
Stroller: 20,000 lb. * $42/lb. = $840,000; Walker: 10,000 lb. * $28/lb. = $280,000;Jogger: 5,000 lb. * $58/lb. = $290,000; Runner: 5,000 lb. * $22/lb. = $110,000
**Sales value at split off:
Stroller: 20,000 lb. * $28/lb. = $560,000; Walker: 10,000 lb. * $7/lb. = $70,000
Jogger: 5,000 lb. * $36/lb. = $180,000; Runner: 5,000 lb. * $18/lb. = $90,000
You might also like to view...
Alexander requires all applicants for jobs on the loading dock to demonstrate their proficiency in using tools such as the hand truck. Alexander is giving his applicants a(n) ______ test.
A. cognitive ability B. physical skills C. personality and interest D. drug
The failure to file penalty is ________ of the tax shown on the return for each month (or fraction of a month) the tax return is not filed, up to a maximum of 25%.
A. 5.0% B. 5.5% C. 0.5% D. 0.25%
The overlap that occurs when the same people see an ad twice is referred as
A. duplicated reach. B. program rating. C. unduplicated reach. D. coverage. E. frequency.
Premiums or discounts on bonds payable issued by enterprise funds should be accounted for in the same manner as those of a comparable business entity.
Answer the following statement true (T) or false (F)