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Cardbury Ltd has the possibility to further process these products in order to increase their final sales value. The following additional cost and final sales value after the processing is as follows: Improved product Additional processing Sales value after further cost processing Whole milk4 £14 per litre £20 per litre Semi Skimmed milk £2 per litre £8 per litre Cheese £6 per ton £16 per ton Required: A. Using Sales Value Method, allocate the joint cost to the three products and calculate the cost per unit for each product. (10 marks) B. If Cardbury Ltd wishes to further process these three products after the split off point, calculate which of the products should be further processed and explain your answer. Your answer should indicate which product will be most profitable. (10 marks) Total [20 marks] Cardbury Ltd has the possibility to further process these products in order to increase their final sales value. The following additional cost and final sales value after the processing is as follows: Improved product Additional processing Sales value after further cost processing Whole milk4 £14 per litre £20 per litre Semi Skimmed milk £2 per litre £8 per litre Cheese £6 per ton £16 per ton Required: A. Using Sales Value Method, allocate the joint cost to the three products and calculate the cost per unit for each product. (10 marks) B. If Cardbury Ltd wishes to further process these three products after the split off point, calculate which of the products should be further processed and explain your answer. Your answer should indicate which product will be most profitable. (10 marks) Total [20 marks]
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Incremental Analysis Whole Milk Semi Skimmed milk Cheese Selling price at further ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 9780273713630
13th Revised edition
Authors: James van Horne, John Wachowicz
Posted Date:
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