3) In processing operations, the true cost of raw materials is determined by calculating the cost of
Question:
3) In processing operations, the true cost of raw materials is determined by calculating the cost of materials by considering losses i.e. the initial cost divided by the amount remaining after losses.
i. A small scale processing company buys 200kg of mangoes at ksh 10,000. After peeling and removal of seeds 52% of the initial weight remains. Determine the true cost of the mangoes?
ii. The value of a product after processing is obtained by dividing the cost of raw materials by the final weight of product. If the mangoes are then dried from a moisture content of 92% to a moisture content of 10%, determine the value of the dried mangoes assuming the production costs are negligible
Financial Management Principles and Applications
ISBN: 978-0134417219
13th edition
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin