Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is...

 

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Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows: Joint Cost $110,000 Cereal Yummies Quantity at Split-Off Point 14,000 kilograms Sales Price per Kilogram $8.00 Crummies 10,000 kilograms 9.50 Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $3.50 per kilogram, and the mulch will sell for $20.50 per kilogram. Required: 1-a. Compute the net incremental revenue per kilogram if management decide to process Crummies into the mulch. 1-b. Should Breakfasttime's management decide to process Crummies into the mulch? Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows: Joint Cost $110,000 Cereal Yummies Quantity at Split-Off Point 14,000 kilograms Sales Price per Kilogram $8.00 Crummies 10,000 kilograms 9.50 Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $3.50 per kilogram, and the mulch will sell for $20.50 per kilogram. Required: 1-a. Compute the net incremental revenue per kilogram if management decide to process Crummies into the mulch. 1-b. Should Breakfasttime's management decide to process Crummies into the mulch?

Answer rating: 100% (QA)

1a Net incremental revenue per kilogram Sales pric... View the full answer