Question

Bahrat, Inc. produces three separate products from a common process costing $100,400. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. The cost and selling price data for a recent period are as follows:

		Sales Value at Split-Off Point			Cost to Process Further			Sales Value after Further Processing
Product 12		$50,900			$100,400			$189,200
Product 14		11,000			30,100			34,700
Product 16		59,500			150,100			219,200

Determine the total net income if all products are sold at the split-off point.

Determine the total net income if all products are sold after further processing.

Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)

      

PRODUCT NAME

INCREMENTAL PROFIT/(LOSS)

DECISION

Determine the total net income using the results from the previous part of the question.