Iaci Company Makes Two Products from a Common Input Required:

A) What Is the Net Monetary Advantage (Disadvantage)

Essay

Iaci Company makes two products from a common input.Joint processing costs up to the split-off point total $42,000 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:

$\begin{array}{llll}&\text { Product X} & \text { Product Y } & \text { Total }\\\text { Allocated joint processing costs } & \$ 22,400 & \$ 19,600 & \$ 42,000 \\\text { Sales value at split-off point } & \$ 32,000 & \$ 28,000 & \$ 60,000 \\\text { Costs of further processing } & \$ 11,600 & \$ 25,300 & \$ 36,900 \\\text { Sales value after further processing } & \$ 40,800 & \$ 54,200 & \$ 95,000\end{array}$


Required:

a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
b) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?
c) What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?
d) What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?