Joint products are two or more products produced simultaneously by the common process. These products are not separately identifiable until a certain stage is reached in the manufacturing process. This stage is known as split-off point and the costs incurred prior to this stage are termed as common costs. Consider a situation where joint products “X” and “Y” emerge from a single manufacturing process. Each of the products can either be sold at a split-off point or processed further. Data about the two products is as follows;
Product X Product Y
Rs. per unit Rs. per unit
Common costs from joint process 35.00 35.00
Selling price at split-off point 34.00 48.00
Cost of further processing 18.00 22.00
Selling price after further processing 42.00 58.00
Analyze and identify which of the product(s) should be sold at the split-off point and why? Justify your answer with proper reasoning.
i also need and anybody help and solve it .
both should be sold at split of point because of following reasons
loss for product X =Rs. 1 per unit and after processing Rs. 11 per unit
profit for product Y = Rs. 13 per unit and after processing = Rs. 1 per unit
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