All three products have a Joint cost of 117,000. These products were processed further and sold as f

All three products have a Joint cost of 117,000. These products were processed further and sold as follows.

Chemical Product      Sales          Additional Processing Costs

A                                   230000                          190000

B                                   330000                            300000

C                                   175000                           100000

The company has had an opportunity to sell at split off directly to other processors. If that alternative had been selected, sales would have been A.54000 B 32000 C 54000

The company expects to operate at the same level of production and sales in the forthcoming year.

Could the company increase operating income by altering its processing decisions? If so, what would be the expected overall operating income?

Which products should be processed further and which should be sold at split-off?

Also please complete the table as is shown below, I don’t fully understand the table so if it was filled out correctly I would be able to learn a lot from it, thank you 🙂

Chemical Product A

Chemical Product B

Chemical Product C

Sell at Split-Off

Process Further

Difference

Sell at Split-Off

Process Further

Difference

Sell at Split-Off

Process Further

Difference

Revenues

Cost Beyond Split-Off

Income Effects