Dock Corporation Makes Two Products from a Common Input

Multiple Choice

Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: What is the financial advantage (disadvantage) for the company of processing Product X beyond the split-off point?

A) ($3,500)
B) $27,700
C) $20,500
D) $3,700