Dowchow Corporation Makes Two Products from a Common Input

Dowchow Corporation makes two products from a common input. Joint processing costs up to the split-off point total $38,400 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

-What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

A) $22,400
B) $43,400
C) $20,800
D) $45,000

Correct Answer:

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