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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

 

Required:

Analyze and identify which of the product(s) should be sold at the split-off point and why? Justify your answer with proper reasoning.


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Replies to This Discussion

I also need solution....kindly help

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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