Question
Chineke Ltd manufactures three joint products and one by-product (Dee) in a single process. The following...
Chineke Ltd manufactures three joint products and one by-product (Dee) in a single process. The following are the actual results for March 2019:
|
Ayee Units |
Bee Units |
Cee Units |
Dee Units |
|
|
Production at 100% capacity |
20 000 |
25 000 |
10 000 |
2 000 |
All joint products can be processed further into a superior product namely: Super Aye, Super Bee and Super Cee. Due to strict quality control at the end of the production process, a rejection of 10% of the final product will occur if further processing is done after the split-off point.
The following information is applicable if products are processed further:
|
Super Ayee (N$) |
Super Bee (N$) |
Super Cee (N$) |
|
|
Selling price per unit |
20 |
15 |
25 |
|
Additional processing costs |
4 |
4 |
5 |
Additional information:
Costs incurred in the joint process were:
Direct materials N$285 500
Direct labour N$143 100
Manufacturing overheads N$95 400
Note: By-products are sold for N$3 per unit.
Required:
Calculate the profit attributed to product Super Bee if the total production is sold and the company uses the physical standard method to allocate joint cost is (round off to a whole number) (Assume that a regular market exists for the by-product):
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