Abbey Company uses a joint process to produce products L, M and N. Each product may be sold at split-off or processed further and then sold. Joint processing costs for the year amounted to $500,000. Other information is presented below: Required:
a. Which products, if any, should be processed further?
b. If all three products were processed further, what would be the effect on profits?

Question

Abbey Company uses a joint process to produce products L, M and N. Each product may be sold at split-off or processed further and then sold. Joint processing costs for the year amounted to $500,000. Other information is presented below:  Required:
a. Which products, if any, should be processed further?
b. If all three products were processed further, what would be the effect on profits?

Quizplus · Accepted Answer

The Answer of Abbey Company uses a joint process to produce products L, M and N. Each product may be sold at split-off or processed further and then sold. Joint processing costs for the year amounted to $500,000. Other information is presented below:  Required:
a. Which products, if any, should be processed further?
b. If all three products were processed further, what would be the effect on profits?

Abbey Company Uses a Joint Process to Produce Products L