Acc349 Managerial Accounting: E6-7 Shynee Minerals process materials extracted from mines

Acc349 Managerial Cost Accounting

E6-7

Shynee Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Sarco, Barco, and Larco. Each of these products can be sold as is, or it can be processed further and sold for a higher price. The company incurs joint costs of $180,000 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product.

Sales Value at Split-off Point Allocated Joint Costs Cost to Process Further Sales Value of Processed Product

Sarco $200,000 $40,000 $120,000 $300,000

Barco 300,000 60,000 89,000 400,000

Larco 400,000 80,000 250,000 800,000

Instructions:

Determine whether each of the three joint products should be sold as is, or processed further.
Powered by