Dudley Ltd produces two products, X and Y, at a joint cost of ($480) 000. The company
Question:
Dudley Ltd produces two products, X and Y, at a joint cost of \($480\) 000. The company can sell 620 000 units of product X for \($30\) per unit, or the units can be processed further at a cost of \($160\) 000 to produce 16 000 units of product A, 20 000 units of product B, and 25 000 units of product C. The unit selling prices for products A, B and C are \($45\), \($30\) and \($40\) respectively. The company can sell 24 000 units of product Y or they can be processed further to produce 10 000 units of product D and 15 000 units of product E. The additional processing to produce products D and E will cost \($120\) 000. The per-unit selling prices are product Y \($60\), product D \($100\), and product E $60.
Required
(a) Which of the products should be sold at the split-off point and which should be processed further?
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie