Q1) Solex Company produces three products from common input in joint processing operation. Joint processing costs up to split-off point total $100,000 per year. Company assigns these costs to joint products on basis of their total sales value at split-off point. These sales values are as follows: product X, $50,000; product Y, $90,000; and product Z, $60,000.
Each product may be sold at split-off point or processed further. Extra processing requires no special facilities. Additional processing costs and sales value after further processing for each product (on an annual basis) are given below:
problems: Which product or products must be sold at splot-off point, and which product or products must be processed further? Illustrate computations.