Question: b. Consider a chicken processor which buy chickens, slaughters them and process them in three product lines: Fillets, Drumsticks and Wings. Sales and production cost

b. Consider a chicken processor which buy chickens, slaughters them and process them in three product lines: Fillets, Drumsticks and Wings. Sales and production cost figures are as follows: Total Fillets Drumsticks Wings Sales 3,50 2,40 0,80 0,30 Costs beyond split-off point -1,00 -0,80 -0,04 -0,16 Joint production costs -2,00 Profit (loss) per chicken 0,50 i. Calculate the profit/loss for each product line using the Net Realisable Value method. (1 point) ii. Suppose that Wings are no longer processed and sold. Analyse the profitability of the two remaining product lines (Fillets and Drumsticks) using the Net Realisable Value method. (1 point) iii. Is this allocation scheme insulating or non-insulating? Please explain why. (1 point)

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