Answer:
Zoie
The minimum amount the company should accept if Product 1 is sold at the split-off point is:
= $30,000.
Explanation:
a) Data and Calculations:
Product 1 Product 2
Allocated joint processing costs 21,200 35,700
Sales value at split-off point 38,100 19,200
Costs of further processing 17,000 19,900
Sales value after further processing 30,000 28,300
The minimum amount the company should accept if Product 1 is sold at the split-off point is $30,000.
b) Further processing of Product 1 does not make economic sense. Zoie should sell the product at split-off point at $38,100. Similarly, based on the facts provided, Product 2 hardly deserves further processing.
