1. The Silver Center (TSC) produces cups and platters. TSC purchases silver and other metals that are processed into silver alloy that is used to make platters and cups. TSC incurred $40,000 of materials cost and $44,000 of labor cost to produce the silver alloy. Platters are made first and the residual alloy is remixed into a lower grade silver plated material that is used to make the cups. Remixing cost amount to $2,000. The recent batch contained 4,000 platters and 1,000 cups. TSC sold the platters for $100,000 and the cups for $12,000. Assume number of units is used as the base to allocate the joint cost. Based on this information

a) The Company's total income will decrease by $12,000 if it stops making and selling cups.

b) The Company's total income will increase by$6,800 if it stops making and selling cups.

c) The Company's total income will increase by 4,800 if it stops making and selling cups.

d) The Company's total income will decrease by $10,000 if it stops making and selling cups.

2). If relative market value is used to allocate the joint cost, what is the income earned for cups?

Answer rating: 100% (QA)

1 d Decrease in net income due to nonselling of cups 1200... View the full answer