14 30 special decisions in special manufacturing

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Unformatted text preview: y $100,000 per month by keeping their club open. 14-30 Special Decisions in Special Manufacturing Firms Joint Products:: Joint Products Sell or Process Further Sell or Process Further A joint production process resulting in two A joint production process resulting in two or more products. The point in the or more products. The point in the production process where the joint production process where the joint products are identifiable as separate products are identifiable as separate products is called the split-off point.. products is called the split-off point 14-31 Joint Processing Joint Processing of Cocoa Bean of Cocoa Bean Cocoa beans Cocoa costing $500 per ton Joint Production process costing $600 per ton Total joint cost: $1,100 per ton Cocoa butter sales value $750 for 1,500 pounds Split-off point Cocoa powder sales value $500 for 500 pounds Separable process costing $800 Instant cocoa mix sales value mix sales $2,000 for 500 pounds 14-32 Joint Products Joint Relative Sales Value Method $750 ÷ $1,250 = 60% $750 ÷ $1,250 = 60% 60% × $1,100 = $660 60% × $1,100 = $660 14-33 Joint Products Joint • Cocoa butter is sold at the end of the joint processing. • Cocoa powder may be sold now or processed into instant cocoa mix. Further processing costs of $800 will be incurred if the company elects to make instant cocoa mix. 14-34 Joint Products Joint ( ) The cocoa powder should be processed into instant cocoa mix. 14-35 Decisions Involving Limited Resources Resources • Firms often face the problem of deciding • Firms often face the problem of deciding how limited resources are goi...
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This note was uploaded on 02/10/2014 for the course ACCT 331 taught by Professor Kline during the Fall '10 term at Drexel.

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