Chemicals Ltd owns a supply of North Sea gas liquids, and is developing its downstream activities. It is producing two main products, propane and butane, and there is a by-product, arcone. There are four manufacturing processes involved where the gas passes through Modules 1, 2, 3 and 4.

Production information for April Year 2 is as follows:

1,000 tonnes of liquid A and 600 tonnes of liquid B were issued to Module 1.

Liquid C is issued to Module 2 at the rate of 1 tonne per 4 tonnes of production from Module 1.

Liquid D is added to Module 4 at the rate of 1 tonne per 3 tonnes of output from Module 2.

Arcone arises in Module 1 and represents 25% of the good output of that process. The remaining output of Module 1 passes to Module 2. Of the Module 2 output 75% passes to Module 3 and 25% passes to Module 4. The output of Module 3 is propane and the output of Module 4 is butane.

Materials costs are:

The labour and overhead costs during the month were:

The company is considering selling the products at the undernoted prices:

Required

(1) Draw a diagram of the various processes described.
(2) Ascertain the percentage profit on selling price per tonne of each of these products.

Transcribed Image Text:

A Liquid Liquid B Liquid C Liquid D 60 per tonne 40 per tonne 75 per tonne 120 per tonne