Question: ABC Co. develops four mobile applications in a joint process as follows: Hunger station Talabat Mrsool Tawakalna Total Applications downloaded 52,000 60,000 18,000 28,000 158,000
ABC Co. develops four mobile applications in a joint process as follows:
|
| Hunger station | Talabat | Mrsool | Tawakalna | Total |
| Applications downloaded | 52,000 | 60,000 | 18,000 | 28,000 | 158,000 |
| Sales value at split off | $240,000 | $40,000 | $10,000 | $35,000 | $325,000 |
| Additional cost if developed further | $28,000 | $40,000 | $20,000 | $15,000 | $103,000 |
| Sales value if processed further | $280,000 | $60,000 | $15,000 | $45,000 | $400,000 |
| Joint costs |
|
|
|
| $250,000 |
Required:
(a) Determine which products should be sold at split-off and which should be processed further (show supporting calculations/schedule).
(b) Assuming the company makes decisions that are in its best interests for overall profitability, what would be the company's gross margin?
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