Malakas Company produces 15,000 pounds of Product A and 30,000 pounds of Product B each week by incurring a common variable cost (joint costs) of P700,000. 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: Product A Product B Selling price per pound without further processing P24.00 P18.00 Selling price per pound with further processing 30.00 22.00 Total separate weekly variable costs of further processing 100,000 90,000 To maximize Life Company’s manufacturing contribution margin, identify which product or products should be processed further. How much should be the total separate variable costs of further processing that should be incurred each week after you decision? 1. 90,000 2. 100,000 3. 190,000 4. -0- Group of answer choices 1 2 3 4
Malakas Company produces 15,000 pounds of Product A and 30,000 pounds of Product B each week by incurring a common variable cost (joint costs) of P700,000. 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:
|
|
Product A |
Product B |
|
Selling price per pound without further processing |
P24.00 |
P18.00 |
|
Selling price per pound with further processing |
30.00 |
22.00 |
|
Total separate weekly variable costs of further processing |
100,000 |
90,000 |
To maximize Life Company’s manufacturing contribution margin, identify which product or products should be processed further. How much should be the total separate variable costs of further processing that should be incurred each week after you decision?
|
1. |
90,000 |
|
2. |
100,000 |
|
3. |
190,000 |
|
4. |
-0- |
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