00 1500000 460000000 cost of ending inventories x

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: st of Ending Inventories = x 70,000 units = $1,288,000.00 $7,750,000.00 3(c) Constant Gross Margin Method Goldex Sales Value $15,000,0001 Joint Costs $4,500,000 6 Additional Costs $3,000,000 Gross Margin $7,500,0005 Gross Margin 50% Percentage Holdex $9,500,0002 $3,250,0008 $1,500,000 $4,750,0007 50% Total $24,500,000 $7,750,000 $4,500,000 $12,250,0003 4 50% (i) Goldex Total Cost = $4,500,000 + $3,000,000 = $7,500,000 Cost of Ending Inventories = x 80,000 units = $2,000,000 (ii) Holdex Total Cost = $3,250,000 + $1,500,000 = $4,750,000 Cost of Ending Inventories = x 70,000 units = $1,330,000 3(d) Further Processing Decision After Further Processing Selling price $62 per unit Additional Processing Cost $14 per unit Incremental Revenue (per unit) Incremental Cost (per unit) Incremental Profit (per unit) Before Further Processing $50 per unit $0 per unit $129 $1410 ($2)11 Further process “Goldex” into “Moldex” will decrease profit by $2 per unit, it is not profitable to further process “Goldex” into “Moldex”. So, the company should not further process “Goldex” into “Moldex”. 1 300,000 units* $50 per units =$15,000,000 250,000 units* $38 per units = $9,500,000 3 $24,500,000 -$7,750,000 -$4,500,000 = $12,250,000 2 4 5 = 50% $15,000,000 x 50% = $7,500,000 $15,000,000 - $3,000,000 - $7,500,000 = $4,500,000 7 $9,500,000 x 50% = $4,750,000 8 $9,500,000 - $1,500,000 - $4,750,000 = $3,250,000 9 $62-$50=$12 10 $14-$0=$14 11 $12-$14= -$2 6...
View Full Document

This document was uploaded on 03/26/2014.

Ask a homework question - tutors are online