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Mussina Chemical Company produced Three Joint Assignment
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Assignment Task
Question 1. The Mussina Chemical Company produced Three Joint products at a joint cost of Rs.1,17,000. These products were processed further and sold as follows:
|
Chemical Product |
Sales (Rs.) |
Additional Processing Cost (Rs.) |
|
A |
2,30,000 |
1,90,000 |
|
B |
3,30,000 |
3,00,000 |
|
C |
1,75,000 |
1,00,000 |
The company has had an opportunity to sell at split-off, directly to other processors. If that alternative had been selected, sales would have been A: Rs.54,000; B: Rs.32,000 and C: Rs.54,000.
The company expects to operate at the same level of production and sales in the forthcoming year.
-
Could the company increase operating income by altering its processing decisions? If so, what would be the expected overall operating income?
-
Which products should be processed further, and which should be sold at split-off?
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