QUIK Manufacturing Company Ltd produces two products from a joint process. Information about the two joint products is as follows: Information Product A Product B Budgeted production (in kg) 2 000 4 000 Selling price per kg at split-off $ 10 $ 20 Additional processing costs per kg after split-off (all variable) $ 15 $ 30 Selling price per kg after further processing $40 $50 The cost of the joint process is $ 90 000. Required: a) Which of QUIK company’s joint products should be sold at split-off point? Please support your answer with the necessary calculations. b) Which of QUIK company’s joint products should be processed further? please answer the same with working allocations
QUIK Manufacturing Company Ltd produces two products from a joint process. Information about the two joint products is as follows: Information Product A Product B Budgeted production (in kg) 2 000 4 000 Selling price per kg at split-off $ 10 $ 20 Additional processing costs per kg after split-off (all variable) $ 15 $ 30 Selling price per kg after further processing $40 $50 The cost of the joint process is $ 90 000. Required: a) Which of QUIK company’s joint products should be sold at split-off point? Please support your answer with the necessary calculations. b) Which of QUIK company’s joint products should be processed further? please answer the same with working allocations
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
QUIK Manufacturing Company Ltd produces two products from a joint process. Information
about the two joint products is as follows:
Information Product A Product B
Budgeted production (in kg) 2 000 4 000
Selling price per kg at split-off $ 10 $ 20
Additional
after split-off (all variable)
$ 15 $ 30
Selling price per kg after further
processing
$40 $50
The cost of the joint process is $ 90 000.
Required:
a) Which of QUIK company’s joint products should be sold at split-off point? Please support
your answer with the necessary calculations.
b) Which of QUIK company’s joint products should be processed further?
please answer the same with working allocations
Transcribed Image Text:Information
Product A
Product B
Budgeted production (in kg)
Selling price per kg at split-off
Additional processing costs per kg
after split-off (all variable)
2 000
$ 10
$ 15
4 000
$ 20
$ 30
Selling price per kg after further
processing
$40
$50
The cost of the joint process is $ 90 000.
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