Products Gamma and Delta are joint products (A+ Guaranteed)

Products Gamma and Delta are joint products. The joint production cost of the product is $800. Gamma has a market value of $500 at the split-off point. If Gamma is further processed at an additional cost of $600, its market value is $1,400. Product Delta has a market value of $1,100 at the split-off point. If Product Delta is further processed at an additional cost of $300, its market value is $1,400. Using the relative sales method, calculate the joint product cost that would be allocated to Gamma and Delta. How do you know of one of the products should be further processed?

Here’s the SOLUTION

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