SECTION B ANSWER ANY TWO (2) QUESTIONS QUESTION 2 [25 MARKS] Wright Builder Inc. is a manufacturer of granite slabs. Wright Builder digs blocks of granite out of its quarry. All the granite extracted goes through the processes of quarrying and cutting. Two joint products (monuments and granite slabs) are produced along with a by-product called grit. Monuments are cut, polished, and engraved in a variety of standard shapes, sizes, and patterns before being sold. The granite slabs are special-ordered by contractors for kitchen worktops. These slabs are cut and polished to exacting specifications. The small pieces of granite resulting from the cutting process are crushed and sold to farm suppliers as poultry grit. Wright Builder has the following costs and output information: Process Cost (Rs) Tonnes of output Quarry 700,000 Cutting 500,000 Monuments 600,000 15,000 Granite slabs 800,000 25,000 Grit 20,000 3,000 A local farm-supplier purchases all of the grit that is produced at Rs80 per tonne. Assume that Wright Builders uses the physical unit method to allocate joint costs. REQUIRED (a) What would be the cost per tonne of monuments and granite slabs, assuming that the grit is accounted for as "Other Income"? [9 Marks] (b) What would be the cost per tonne of monuments and granite slabs, assuming that the grit is accounted for as by-product revenue deducted from the main product cost? [9 Marks] (c) Explain the alternative methods of allocating joint costs to products. [7 Marks] Page 4 of 9