Polymtech uses advanced laser technology to manufacture polymers for a variety of applications. One of their processes
Question:
Required:
a. Which of the four polymers should be processed further and then sold, and which polymers should be sold immediately without further processing?
b. Should Polymtech be producing batches of these four polymers?
c. What is the maximum cost per batch (excluding any further processing costs) that Polymtech is willing to incur before Polymtech stops producing batches of these four polymers? Assume that all selling prices and further processing costs do not change.
d. To analyze the relative profitability of the four polymers, allocate the batch production cost of $2,090 to each of the four polymers using the number of grams of each polymer produced in the batch as the allocation base. Which polymer is the most and which polymer is the least profitable after allocating the $2,090 batch cost?
e. Based on your analysis in part (d), recommend actions that management can take to improve the profitability of producing batches of these four polymers?
Step by Step Answer:
Accounting for Decision Making and Control
ISBN: 978-1259564550
9th edition
Authors: Jerold Zimmerman