A company manufactures three products using the same production process. The costs incurred up to the split-off point are $190,000. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows.
Product Number of
Units Produced Selling Price
at Split-Off Selling Price
after Processing Additional
Processing Costs
D 3,800 $10.00 $14.50 $11,100
E 5,500 11.00 15.70 18,250
F 1,500 19.00 22.12 7,280
(b1) Determine the incremental profit (loss) of each product(s).(Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Product D Product E Product F
Incremental profit (loss) $ $ $
(b2) Which product(s) should be processed further and which should be sold at the split-off point?
Product D
Sold at the split-off pointprocess further
Product E
Sold at the split-off pointprocess further
Product F
Sold at the split-off pointprocess further