The Ali Chemical Company processes a liquid mixture into two products: SLX-241 and QY-58. A batch of mixture yields 400 liters of SLX-241 and 800 kilograms of QY-58. The cost to obtain a batch of the liquid mixture is $5,000, and the cost to process it into the two products is $1,500. The SLX-241 must be filtered prior to sale at a cost of $2 per liter. The filtered product can then be sold for $8 per liter. Two hundred kilograms of an inert substance are mixed with the 800 kilograms of QY-58 to reduce its toxicity. The inert substance costs $0.50 per kilogram. The diluted QY-58 is then sold for $6 per kilogram.

A. What are the joint costs for the process yielding the two products?
B. What are the separable costs for each product?
C. What is the total cost per unit of each product if joint costs are allocated using the NRV method?

  • CreatedJanuary 26, 2015
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