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 1,500 2,000 3,000
Per unit sales value at split-off $ 19.00 $ 21.00 $ 24.00
Added processing costs per unit $ 7.00 $ 7.50 $ 7.00
Per unit sales value if processed further $ 29.00 $ 29.00 $ 30.00
The cost of the joint raw material input is $149,000. Which of the products should be processed beyond the split-off point?
Product X Product Y Product Z
A) Yes Yes No
B) No Yes No
C) Yes No Yes
D) No Yes Yes
1. Choice D
2. Choice A
3. Choice B
4. Choice C