Answer:
Financial disadvantage of product X (4,900)
Financial advantage product Y 8500
Explanation:
A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Product X $
Sales after split-off point 38,000
Sales value at the split-off point <u>20,000</u>
Additional sales revenue 18,000
Further processing cost <u>(22,900</u> )
Financial disadvantage <u> (4,900)</u><u> </u>
Product Y $
Sales after split-off point 55,700
Sales value at the split-off point <u> 30,000</u>
Additional sales revenue 25700
Further processing cost <u>(17,200)</u>
Financial advantage <u> 8500
</u>
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