Bahrat, Inc. produces three separate products from a common process costing $100,000. 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:
Determine whether to sell or process further—joint products.
Instructions
a. Determine the total net income if all products are sold at the split-off point.
b. Determine the total net income if all products are sold after further processing.
c. Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further.
d. Determine the total net income using the results from part (c) and explain why the net income is different from that determined in part (b)
