SELL AT SPLIT - OFF POINT OR PROCESS FURTHER & JOINT COST ALLOCATION Lauricella Inc. produces three products from a common set of inputs for $95,000. Other sales and cost data follow: Product Regular Special Premium Quantity 8,000 5,000 4,000 At Split-off $8 Unit Sales Price 856 After further Processing $10 8 10 Costs After Split-off Point $ 10,000 15,000 20,000 REQUIRED: 1. Which products should be sold at the split-off point? 2. Which products should be processed further? 3. What are Joint Costs? 4. For the purposes of making this decision, should joint costs be allocated? Why or why not? 5. Are there any OTHER reasons why we might want to allocate these costs?

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