In a joint process Wear Art produces precut fabrics for three products: dre

In a joint process Wear Art produces precut fabrics for

three products: dresses jackets and blouses. Joint cost is allocated on the basis of relative

sales value at split-off. The company can choose to process each of the products further

rather than sell the fabric at split-off. Information related to these products follows.

Dresses Jackets Blouses Total

Number of units produced 10000 16000 6000 32000

Joint cost allocated ? $138000 ? $360000

Sales values at split-off point ? $230000 $ 80000 $600000

Additional costs of processing further $ 26000 $ 20000 $ 78000 $124000

Sales values after all processing $300000 $268000 $210000 $778000

a. What amount of joint cost should be allocated to dresses and blouses?

b. What is the sales values at the split-off point for dresses?

c. Should any of the products be processed beyond the split-off point? Show

computations.

d. If 12000 jackets are processed further and sold at the regular selling price what is

the gross profit on the sale