Joint cost apportionment and decisien on further processing BK Chemicals produces three joint products in one common
Question:
Joint cost apportionment and decisien on further processing BK Chemicals produces three joint products in one common process but each product is capable of being further processed separately after the split-off point. The estimated data given below relate to June:
Pre-separation point joint costs are estimated to be £40 000 and it is current practice to apportion these to the three products according to litres produced.
You are required:
(i) to prepare a statement of estimated profit or loss for each product and in total for June if all three products are processed further, and (ii) to advise how profits could be maximized if one or more products are sold at the split-off point. Your advice should be supported by a profit statement.
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