) Explain the terms: joint products, joint costs, and split-off point

b c) Neharika Fruit Company sells premium-quality oranges and other citrus fruits by mail order. Protecting the fruit during shipping is important so the company has designed and produces shipping boxes. The annual cost to make 60,000 boxes is as follows:

Materials

Tk. 96,000

Labor

12,000

Indirect manufacturing costs:

Variable

9.600

Fixed

46.800

Total

Tk. 164,400

Therefore, the cost per box averages Tk. 2.74 Suppose Anuradha submits a bid to supply Neharika with boxes for Tk. 2.24 per box. Neharika must give Anuradha the box design specifications, and the boxes wi!! be made according to those specs. Required:

How much, if any, would Neharika save by buying the boxes from Anuradha? II. What subjective factors should affect Neharika's decision about whether to make or buy the boxes?

1.

41. Suppose all the tixed costs represent depreciation on equipment that was purchased for Tk. 234.000 and is just about at the end of its 5-year life. New replacement equipment will cost Tk. 375,000 and is also expected to last 5 years. In this case, how much, if any, would Neharika save by buying the boxes from Anuradha?