Scotty Limited have made two special skin oils for many years from the same process. These are called Nova Oil and Neptune Oil. The Joint processing costs of £150,000 incurred up-to the split-off point. At the split-off point, they get 10,0000 Litres of Nova Oil 50,000 Litres of Neptune Oil Joint Cost £100,000 Selling prices at split-off point Nova Oil £1.25 per litre Neptune Oil £2.00 per litre Nova Oil can be processed further to produce: 60,000 Litres of SuperNova Oil SuperNova will cost extra fixed cost of: £20,000 Also, an extra variable cost of: £0.45 Per litre of input The sales price of SuperNova is: £3 Per litre Which production option will maximise the profitability of Scotty Limited? Choose one from the following: A. Nova and Neptune Oils B. Nova and SuperNova Oils C. Neptune and SuperNova Oils D. Only SuperNova Oil
- Scotty Limited have made two special skin oils for many years from the same process. These are called Nova Oil and Neptune Oil. The Joint
processing costs of £150,000 incurred up-to the split-off point.
At the split-off point, they get
10,0000 Litres of Nova Oil 50,000 Litres of Neptune Oil
Joint Cost £100,000
Selling prices at split-off point
Nova Oil £1.25 per litre
Neptune Oil £2.00 per litre
Nova Oil can be processed further to produce: 60,000 Litres of SuperNova Oil
SuperNova will cost extra fixed cost of: £20,000
Also, an extra variable cost of: £0.45 Per litre of input
The sales price of SuperNova is: £3 Per litre
Which production option will maximise the profitability of Scotty Limited?
Choose one from the following:
A. Nova and Neptune Oils
B. Nova and SuperNova Oils
C. Neptune and SuperNova Oils
D. Only SuperNova Oil
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