Cost and Management Accounting: P7-38 The Salinas Company produces three products

Cost and Management Accounting P7-38 Joint Products 
The Salinas Company produces three products X, Y and Z from a joint process. Each product can be sold at the split-off point or processed further. Additional processing requires no special facilities, and the production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond split-off. Joint production costs for the year were $80,000. Sales value and costs needed to evaluate Salinas' production policy follow: 
Add'l Sales Values and costs if processed further 
Product Units Produced Sales values as split-off Sales values Added Costs 
X 5,000 25,000 55,000 9,000 
Y 4,000 41,000 45,000 7,000 
Z 1,000 24,000 30,000 8,000 

1. Determine the unit cost and gross profit for each product if Salinas allocates joint production costs in proportion to the relatively physical volume of output. 
2. Determine unit costs and gross profit for each product if Salinas allocates joint costs using the sales value method. 
3. Should the firm sell any of its product after further processing? 
4. Salinas has been selling all of its products at split-off point. Selling any of the products after further processing will entail direct competition with some major customers. What strategic factors does the firm need to consider in deciding whether to process any of the products further?
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