Question 6 The multi-fridge comes in three different sizes, the bachelor size, the family size and the industrial size. The division responsible for manufacturing the multi-fridge can choose between adding an ice maker to these fridges or not. A joint production costs of $120,000 per year are allocated to each size of fridge based on the relative number of units produced and the following budgeted information is available for the coming year.

Required: Advise whether it is worth adding an ice maker to these fridges or not. Use calculations for supporting your argument. (Sell and further processing, Joint costing, Chapter 6, 5 marks)

Table 4 - Budgeted production