Problem:
Wallace Company produces two products from a common input. Data relating to the two products are given below:
                                                                  Product A                   Product B
Sales value at the split off point....                $60,000                       $120,000
Allocated joint product costs...                      $45,000                       $90,000
Sales value after further processing...            $90,000                       $200,000
Cost of further processing...                          $20,000                       $85,000
Determine which of the products should be sold at the split off point, and which should be processed further before sale. Use the form that appears below.
                                                                                    Product A                              Product B
Sales value after further processing...                             $________                           $________
Sales value at the split off point...                                   _________                           _________
Incremental revenue from further processing...                _________                           _________
Less cost of further processing...                                     _________                           _________
Profit (loss) from further processing...                            $________                           $________