Maxwell Company manufactures two products from a joint process. Information about the two joint products is as follows: $\begin{array}{lcc}
& \text { Product ABC } & \text { Froduct XYZ }\
\text { Anticipated production (in gall ons) } & 40,000 & 50,000 \
\text { Selling price per gall on at split-off } & £ 50 & £60 \
\text { Additional processing costs per gallon }\
\text { after split-off (all variable) } & £ 25 & £95 \
\text { Selling price per gall on after further }
\
\text { Processing } & £ 100 &£ 140 \
\end{array}$ The cost of the joint process is £1,500,000.
a.Which of Maxwell's joint products should be processed further?
b.Assume that Maxwell currently sells both products at the split-off point. What is Maxwell's income?
c.Assume that Maxwell makes decisions about its joint products that maximize profit. What is Maxwell's income?

Question

Maxwell Company manufactures two products from a joint process. Information about the two joint products is as follows: $\begin{array}{lcc}
& \text { Product ABC } & \text { Froduct XYZ }\
 \text { Anticipated production (in gall ons) } & 40,000 & 50,000 \
 \text { Selling price per gall on at split-off } & £ 50 & £60  \
\text { Additional processing costs per gallon }\
\text { after split-off (all variable) } & £ 25 & £95 \
\text { Selling price per gall on after further }
 \
 \text { Processing } & £ 100 &£ 140 \
\end{array}$  The cost of the joint process is £1,500,000. 
a.Which of Maxwell's joint products should be processed further?
b.Assume that Maxwell currently sells both products at the split-off point. What is Maxwell's income?
c.Assume that Maxwell makes decisions about its joint products that maximize profit. What is Maxwell's income?

Quizplus · Accepted Answer

The Answer of Maxwell Company manufactures two products from a joint process. Information about the two joint products is as follows: $\begin{array}{lcc}
& \text { Product ABC } & \text { Froduct XYZ }\
 \text { Anticipated production (in gall ons) } & 40,000 & 50,000 \
 \text { Selling price per gall on at split-off } & £ 50 & £60  \
\text { Additional processing costs per gallon }\
\text { after split-off (all variable) } & £ 25 & £95 \
\text { Selling price per gall on after further }
 \
 \text { Processing } & £ 100 &£ 140 \
\end{array}$  The cost of the joint process is £1,500,000. 
a.Which of Maxwell's joint products should be processed further?
b.Assume that Maxwell currently sells both products at the split-off point. What is Maxwell's income?
c.Assume that Maxwell makes decisions about its joint products that maximize profit. What is Maxwell's income?

Maxwell Company Manufactures Two Products from a Joint Process The Cost of the Joint Process Is £1,500,000