Answer:
Prosperous Production
The minimum amount the company should accept for Product AE if it is to be sold at the split-off point is:
= $ 32,200.
Explanation:
a) Data and Calculations:
Annual joint processing costs up to split-off = $42,300
                                                            Product AE     Product CJ    Total 
Allocated joint processing costs        $ 25,600       $ 16,700    $ 42,300 
Sales value at split-off point               $ 32,200       $ 21,500    $ 53,700 
Costs of further processing                $ 16,700        $ 17,300   $ 34,000 
Sales value after further processing $ 48,500       $ 40,200   $ 88,700
b) If the company accepts any amount that is less than the sales value at the split-off point, it will not make enough profit as offered by the market.   A further review shows that the company will lose $400 if it processes Product AE further than the split-off point.  At the split-off point, it will make a gain of $6,600.  After further processing, it will only record a gain of $6,200.