QUESTION $2$

$(26$ Marks$)$

The question consists of two unrelated parts.

PART A

$(16$ Marks$)$

The following summary indicates the selling prices, costs, and output of joint products $x$ and $Y$ from a manufacturing process:

$\backslash$table$[[,$Product X$,$Product Y$],[$Selling price $($per kg$),$R$200,$R$140],[$Share of joint costs $($per kg$),$R$120,$R$120],[$Profit$,$R$80,$R$20],[$Output $($kilograms$),120,100]]$

Further processing cost

Although Product $x$ can be processed further, both products can be sold at the splitoff point. To further process Product $x,$ the new selling price and related costs are as follows:

$\backslash$table$[[$Selling price,R $245$ per kg$],[$Further processing cost,R $25$ per kg$]]$

REQUIRED:

$2\mathrm{.}1.$ Calculate the total joint costs for Products $x$ and $Y$ and state which method was used to apportion the joint costs.

$(3$ marks$)$

$2\mathrm{.}2.$ Advise whether Product $x$ should be processed further. Support your answer with the relevant calculations.

$(4$ marks$)$