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DATA INPUT
Costs:
Input Cost $180,000
Processing Cost $450,000
Outputs
Resoline (lbs) 8,000
Krypto (lbs) 2,000
Conversion Prices
Resoline into Resolite 15$
Krypto into Kryptite 45$
Kryptite into Omega 120$
Packaging Omega 18$
Sale Price (per lb)
Resoline 75$
Krypto 150$
Resolite 105$
Kryptite 285$
Omega 390$
SOLUTION
2.a. Physical-units method
Joint Cost Joint Products Quantity at Split-Off Point Relative Proportion Allocation of Joint Costs
2.b.Relative-Sales method
Joint Cost Joint Products Sales Value at Split-Off Point Relative Proportion Allocation of Joint Costs
2.c.Relative-Sales method
Joint Cost Joint Products Sales value of final product Separable Processing Cost Net Realizable Value Relative Proportion Allocation of Joint Costs
630,000$ Resolite 840,000$ 120,000$ 720,000$ 3/5 378,000$
3. Decision Analysis
Incremental Revenues per pound
Sales Price of Omega 390$
