Each litre yields the following : Pluto-600ml , Merc 50 ml and Sarn 350ml . ( composition per litre)Now for the 2020 financial year are: 800 000 litres of Pluto; 80 000 litres of Merc; and 450 000 litres evaluate the correctness of each item on the "budgeted joint costs allocation to the joint products" working paper.In your evaluation, you must:? Focus on the application of costing principles;? Review workingsotes for errors, where applicable, provide correct workings; ? Not recalculate the joint costs to be allocated to products; and? Not recalculate the allocation of joint costs to joint products. Assume that the budgeted joint costs to be allocated to Pluto for the 2020

Working paper subject : Budgeted joint costs allocation to the joint products Period WP 01 : Year-ending 31 December 2020 Details Section Workings/Notes Amount reference R'000 Neutral-chemical purchase costs 2.3 1 400 000 litres x R320 448 000 Chemical mixing and balancing costs 2.4. 5 000 litres x R450 2 250 Chemical processing costs 2.5. 5 000 litres x R120 600 Chemical cooling costs 2.6. given 38 060 Temperature control costs 2.6. given 1 200 Rent expenses - properties 2.7 (R25K + R8K) x 12 months 396 Salary - Mrs Neptune 2.8 given 2 500 Fixed administrative costs 2.9. not joint costs 0 Packaging labour costs 2. 10. non-manufacturing costs 0 Other variable manufacturing overheads 2. 10. given 6 827 Further variable processing costs 2.10. only incurred by Pluto 0 Joint costs to allocate to the joint products R499 833 Allocated to Pluto 1 . R499 833 + 3 chemical types |R166 611 Allocated to Merc 1 . R499 833 + 3 chemical types R166 611 Allocated to Sarn 1 . R499 833 + 3 chemical types R166 611 2.1. Budgeted sales are 700 000 litres of Pluto @ R900 per litre (p/I); 80 000 litres of Merc @ R50 p/l; and 350 000 litres of Sarn @ R700 p/l. Except for Merc whose budgeted variable distribution costs is R12 p/l, all the other products' budgeted variable distribution costs are R50 p/l per product. 2.2. No opening inventory of any type is budgeted for and where applicable, closing inventory relate to finished goods only. 2.3. Budgeted total purchases of the neutral-chemical are 1 400 000 litres @ R320 p/l. 2.4. Chemical mixing and balancing occur in batches of 5 000 litres per batch at 150 hours per batch. The related budgeted costs are R450 per hour. 2.5. Chemical processing is budgeted for at R120 per hour of chemical mixing and balancing. 2.6. Chemical cooling is budgeted for at R38 060 000 while Property A's temperature control costs (which does not include property rental costs) are budgeted for at R1 200 000. 2.7. Property A and Property B are both rented for the entire financial year at R25 000 per month and R8 000 per month, respectively. 2.8. Mrs Neptune's annual remuneration is R2 500 000. 2.9. The budgeted total fixed administration costs are R2 904 000. CONFIDENTIAL [TURN OVER]