Arcadia, SA, uses a joint process to produce Products W, X, Y, Z. Each product may be sold at its split-off point or processed further. Additional processing costs of specific products are entirely variable. Joint processing costs for a single batch of joint products are £200,000. Other relevant data are as follows: Required:
a.
Determine which products should be processed further.
b.
How will processing each product further affect profits?

Question

Arcadia, SA, uses a joint process to produce Products W, X, Y, Z. Each product may be sold at its split-off point or processed further. Additional processing costs of specific products are entirely variable. Joint processing costs for a single batch of joint products are £200,000. Other relevant data are as follows:  Required: 
a.
Determine which products should be processed further.
b.
How will processing each product further affect profits?

Quizplus · Accepted Answer

The Answer of Arcadia, SA, uses a joint process to produce Products W, X, Y, Z. Each product may be sold at its split-off point or processed further. Additional processing costs of specific products are entirely variable. Joint processing costs for a single batch of joint products are £200,000. Other relevant data are as follows:  Required: 
a.
Determine which products should be processed further.
b.
How will processing each product further affect profits?

Arcadia, SA, Uses a Joint Process to Produce Products W