Dowchow Corporation Makes Two Products from a Common Input

Multiple Choice

Dowchow Corporation makes two products from a common input. Joint processing costs up to the split-off point total $38,400 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 net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

A) $1,600
B) $22,400
C) $27,600
D) $(3,600)