Life Company produces 15,000 pounds of Product Emerald and 30,000 pounds of Product Ruby each week by incurring a common variable cost of P400,000. These two products can be sold as is or processed further. Further processing of either products does not delay the production of subsequent batches of the joint product. Data regarding these two products are as follows: Powered by TCPDF (www.tcpdf.org) Selling price per pound without further processing Selling price per pound with further processing Total separate weekly variable costs of further processing Emerald P12.00 15.00 50,000 Ruby P9.00 11.00 45,000 To maximize Life Company’s manufacturing contribution margin, the total separate variable costs of further processing that should be incurred each week are: A. 45,000 B. 50,000 C. 95,000
Life Company produces 15,000 pounds of Product Emerald and 30,000 pounds of Product Ruby each week by incurring a common variable cost of P400,000. These two products can be sold as is or processed further. Further processing of either products does not delay the production of subsequent batches of the joint product. Data regarding these two products are as follows:
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Selling price per pound without further processing
Selling price per pound with further processing
Total separate weekly variable costs of further processing
Emerald P12.00 15.00 50,000
Ruby P9.00 11.00
45,000
To maximize Life Company’s manufacturing contribution margin, the total separate variable costs of further processing that should be incurred each week are:
A. 45,000 B. 50,000 C. 95,000
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