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Prosner Corp Required:
Which Product or Products Should Be Sold at the a Joint

Question 181

Essay

Prosner Corp. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $500,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point.
Each product may be sold at the split-off point or processed further. The additional processing costs and sales value after further processing for each product (on an annual basis) are:
 Further  Sales Value  Sales Value at  Processing  After Further  Split-Off  Costs  Processing  Product D $300,000$125,000$534,000 Product F $275,000$210,000$450,000 Product G $195,000$135,000$360,000\begin{array}{llll}& & \text { Further } & \text { Sales Value } \\& \text { Sales Value at } & \text { Processing } & \text { After Further } \\& \text { Split-Off } & \text { Costs } & \text { Processing } \\\text { Product D } & \$ 300,00 0& \$ 125,00 0 & \$ 534,000\\\text { Product F } & \$ 275,000& \$ 210,000 & \$ 450,000 \\\text { Product G } & \$ 195,000 & \$ 135,000& \$ 360,000\end{array} Required:
Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.

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