Sell or process further Winn Mills processes cotton in a joint process that yields two...
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Sell or process further Winn Mills processes cotton in a joint process that yields two joint products: fabric and yarn. May's joint cost is $120,000, and the sales value at split-off are $360,000 for fabric and $300,000 for yarn. If the products are processed beyond split-off, the final sales value will be $540,000 for fabric and $420,000 for yarn. Additional costs of processing are expected to be $120,000 for fabric and $102,000 for yarn. Should the products be processed further?
Fabric
Yarn
Net benefit (cost) of further processing
Answer
Answer
Process Further?
Fabric
AnswerYes No
Yarn
AnswerYes No
Answer & Explanation
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