Voorhees Manufacturing Corporation Produces Three Products in a Joint Process

Essay

Voorhees Manufacturing Corporation produces three products in a joint process.Additional information is as follows: $$\begin{array} { | l | r | r | r | r | } \hline&\mathbf{0} & \mathbf{P} & \mathbf{Q} & \text { Total } \\ \text { Units produced } & 42,000 & 50,000 & 8,000 & 100,000 \\\hline \begin{array} { l } \text { Sales value at split } \\\text { off }\end{array} & \$ 250,000 & \$ 50,000 & \$ 20,000 & \$ 320,000 \\\hline \begin{array} { l } \text { Additional costs if } \\\text { processed further }\end{array} & \$ 18,000 & \$ 30,000 & \$ 10,000 & \$ 58,000 \\\hline \begin{array} { l } \text { Sales value if } \\\text { processed further } \\\text { Joint costs }\end{array} & \$ 290,000 & \$ 70,000 & \$ 25,000 & \$ 385,000 \\\hline \begin{array} { l } \text { Product weights in } \\\text { pounds }\end{array} & 84,000 & 150,000 & 8,000 & 242,000 \\\hline\end{array}$$
Required:
(a)Determine which products should be sold at split-off and which should be processed further.(b)Assuming Voorhees makes decisions that are in its best interests for overall profitability,what would be the company's gross margin?