Corcoran Ltd operate several manufacturing processes. In process G, joint products (P1 and P2) are created in the ratio 5:3 by volume from the raw materials input. In this process, a normal loss of 5 per cent of the raw material input is expected. Losses have a realizable value of £5 per litre.
The company holds no work in progress. The joint costs are apportioned to the joint products using the physical measure basis.
The following information relates to process G for last month:
Raw materials input ..............................60,000 litres (at a cost of £381,000)
Abnormal gain .........................................1,000 litres
Other costs incurred:
Direct labour  ..........................................£180,000
Direct expenses ........................................£54,000
Production ............................................110% of direct labour cost Overheads

(a) Prepare the process G account for last month in which both the output volumes and values for each of the joint products are shown separately.

The company can sell product P1 for £20 per litre at the end of process G. It is considering a proposal to further process P1 in process H in order to create product PP1.
Process H has sufficient spare capacity to do this work.
The further processing in process H would cost £4 per litre input from process G. In process H, there would be a normal loss in volume of 10 per cent of the input to that process. This loss has no realizable value. Product PP1 could then be sold for £26 per litre.
(b) Determine, based on financial considerations only, whether product P1 should be further processed to create product PP1.
(c) In the context of process G in Corcoran Ltd, explain the difference between ‘direct expenses’ and ‘production overheads’