The following information is identical for all Joint Joinery Company questions.

Joint Joinery makes two products from a common input. Joint processing costs up to the split-off point total $49,600 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:

Dados Dovetails Total
Allocated joint processing costs $ 19,200 $ 30,400 $ 49,600
Sales value at split-off point $ 24,000 $ 38,000 $ 62,000
Cost of further processing $ 23,700 $ 18,000 $ 41,700
Sales value after further processing $ 46,800 $ 57,300 $ 104,100

Required:
b. What is the price for Dados at the split-off point that makes the company indifferent between sell at split-off or process further?

Note : Answer in a whole number only. DO NOT use a "$"

Question

The following information is identical for all Joint Joinery Company questions.

Joint Joinery makes two products from a common input. Joint processing costs up to the split-off point total $49,600 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:

Dados	Dovetails	Total
Allocated joint processing costs	$ 19,200	$ 30,400	$ 49,600
Sales value at split-off point	$ 24,000	$ 38,000	$ 62,000
Cost of further processing	$ 23,700	$ 18,000	$ 41,700
Sales value after further processing	$ 46,800	$ 57,300	$ 104,100

Required:
b. What is the price for Dados at the split-off point that makes the company indifferent between sell at split-off or process further?

Note : Answer in a whole number only. DO NOT use a  "$"

BlackTom AI · Accepted Answer

We are asked to find the split-off price for Dados that makes the company indifferent between selling Dados at split-off or processing it further.
First, identify the relevant figures for Dados:
- Sales value at split-off for Dados: 24,000 (given in the data).
- Cost of further processing for Dados: 23,700.
- Sales value after further processing for Dados: 46,800.
From the data, the net realizable value (NRV) for Dados if it is processed further is: final sales value minus further processing costs = 46,800 − 23,700 = 23,100.
Indifference occurs when the revenue obtained from selling Dados at split-off equals its NRV if processed further. In other words, the split-off price for Dados should be S such that S = NRV after processing = 23,100.
Therefore, the price for Dados at the split-off point that makes the company indifferent between selling at split-off or processing further is 23,100 (in whole dollars).
If you compare this to the provided example answer of 23,040, note that the core calculation yields 23,100 as the break-even split-off price based on the given NRV, suggesting a possible rounding or per-unit consideration in some contexts. The essential method remains: compare split-off price to NRV after further processing (46,800 − 23,700 = 23,100) to determine indifference.

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