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Reference: 12-16 Dowchow Company makes two products from a common input

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Reference: 12-16

Dowchow Company 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:

 

Product XProduct YTotalAllocated Joint Processing Costs20,80017,60038,400Sales Value at Split-Off Point26,00022,00048,000Costs of Further Processing22,60020,40043,000Sales Value after Further Processing45,00045,90090,900

What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

Question 44 options:

 

A) 

$27,600.

 

B) 

$22,400.

 

C) 

($3,600).

 

D) 

$1,600.