QUESTION THREE Pagane Ltd produces two joint products X &Y in the ratio of 2:1.After the split off point the products can be sold for industrial use or taken to mixing plant for blending and refining. The following information is given for a specific week: Sales x 4000 litres 2000 litres Price per litre Sh35 Sh 60 Sales revenue Sh 140,000 Sh 120,000 Joint process cost Sh 30,000 Sh 15,000 Blending & refining Sh 25,000 Sh 25000 Other separable cost Sh_5,000 Sh_1000 60,000 41,000 Profits Sh80,000 $h79000 Joint process costs (which are allocated on volume) are 85% fixed and 15%variable, whereas the mixing plants costs are 30% fixed and 70% variable. There are only 50 hours available in the mixing plant (usually 30hrs are taken up to processing of product X &Y equally and 20 hrs are used for other work that generates a contribution of Sh 2500 per hour) lt has been suggested that it might be possible to change the mix of the joint process to 3:2 for X & Y respectively at a cost of Sh8 for each additional litre of Y produced by the process. Advice the Co. on whether to change the mix (10 Marks) (TOTAL 30 MARKS)