Question: Solution Technology (ST) produces memory modules in a two-step process: chip fabrication and module assembly. In chip fabrication, each batch of raw silicon wafers yields

 Solution Technology (ST) produces memory modules in a two-step process: chip

Solution Technology (ST) produces memory modules in a two-step process: chip fabrication and module assembly. In chip fabrication, each batch of raw silicon wafers yields 600 standard chips and 900 deluxe chips. Chips are classified as standard or deluxe on the basis of their density (the number off memory bits on each chip). Standard chips have 500 memory bits per chip and deluxe chips have 1000 memory bits per chip. Joint costs to process each batch are $43,350. In module assembly each batch of standard chips is converted into standard memory modules at a separately costs of $1,575 and then sold for $21,000. Each batch of deluxe chips is converted into deluxe memory modules at a separately identified costs of $3675 and then sold for $39,750. 1. Allocate joint costs of each batch to deluxe modules and standards modules using the constant gross margin percentage NRV method. 2. ST can process each batch of 600 standard memory modules to yield 525 DRAM at an additional costs of $2400. The selling price per DRAM module would be $69. Should ST sells the standard memory module or the DRAM module

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