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Davidian Company uses a joint process to produce products W, X, Y, and 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 $120,000. Other relevant data are as follows:

Sales Value Additional Sales Value of Product at Split-Off Processing Costs Final Product

W $ 40,000 $ 60,000 $ 80,000
X $ 12,000 $ 4,000 $ 20,000
Y $ 20,000 $ 32,000 $120,000
Z $ 28,000 $ 20,000 $ 32,000
$100,000 $116,000 $252,000

Which products should Davidian process further?

Accounting Basics, Accounting

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  • Reference No.:- M946007

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