Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $42,500 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:

Product X Product Y Total

Allocated joint processing costs $ 17,000 $ 25,500 $ 42,500

Sales value at split-off point $ 20,000 $ 30,000 $ 50,000

Costs of further processing $ 22,900 $ 17,200 $ 40,100

Sales value after further processing $ 38,000 $ 55,700 $ 93,700

Required:

a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point?

b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point?