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JT_COST_Discussion_Qns - 41 L RAT SOAP 100 litres sold at...

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Unformatted text preview: 41 L RAT SOAP 100 litres, sold at SEE/litre JOINT COSTS MAT $250 (500 litres) PROC $650 GLYCERINE 400 litres, sold ax 31mm COSTS ALLOCATED PER LITRE E V AT SPLIT-QFF SALES WEIGHT 'COSTS ALLOCATED PER LITRE " SALES . SEP COSTS I NET WEIGHT ALLOCATED PER LII‘RE HIE-V QQNSTANT QRQSS MARQIN ”1&ng IRM PRQFIT METHQD! Case 1 SUGAR 6O 1b,.SP m $4llb JT COSTS MAT $100 (100 lbs) MOLASSES 4011), SP = $l/Ib PROC $150 For additional processing costs of $35., the molasses can be reprocessed to yield 30 lb. of molasses and 10 lb. of sugar. Should the opportunity be taken? Case 2 300 lb. of A, SP = $2111) CURRENT JT COSTS MAT $1200 (600 lb) PROC $300 30011). of B, SP = $4/1b A manager has suggested that B be further processed at a cost of $550 into 300 lb. C, a new product that would sell at,$5/lb. With $750 material cost (ie B), this would yield a net income of $200. Another manager disagrees. She suggests that, while agreeing about the other costs, the material costs attributable to this decision will in fact be $1 ,000, resulting in - a loss of $50. Who is correct? Case3 Assume here that in the original basic illustration, output of glycol amounts to only 300 litres instead of 400, still sold for $2. i) How does this affect the per litre joint Costing calculations? ii) Is it still worthwhile producing the glycol? ...
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