Question
Augusta incurred joint product costs up to the splitoff point of $5,453,000 during the fiscal year. The head of Augusta,Tara Wu,is considering a variety of
Augusta incurred joint product costs up to the splitoff point of
$5,453,000 during the fiscal year. The head of Augusta,Tara Wu,is considering a variety of alternatives that would potentially change the way the three products are processed and sold. Proposed changes for each product are as follows:
Amber chips can be incorporated into Augusta's own memory stick. However, this additional processing causes a loss of 27,500 units of Amber. The separable costs to further process Amber chips are estimated to be $745,000 annually. The memory stick would sell for$5.35 per unit. | |
Augusta's R&D unit has recommended that the company process Bronze further into a 3D vertical chip and sell it to a high-end vendor of datacentre products. The additional processing would cost $1,000,200 annually and would result in 15% more units of product. The 3D vertical chip sells for $4.10 per unit | |
The third chip is currently incorporated into a solid-state device under the AT name. Galaxy Electronics has approached Augusta with an offer to purchase this chip at the splitoff point for $2.50 per unit |
Please do step by step calculations
AT name. Data regarding these three products for the fiscal year ending April 30 , is below. (Click on the icon for the data.) (Click on the icon for more information.) the nearest whole dollar.) Required 1. Allocate the $5,453,000 joint production cost to Amber, Bronze, and AT with Cobalt using the NRV method. 2. Identify which of the three joint products Augusta should sell at the splitoff point in the future and which of the three the company should process further to maximize operating income. Support your decisions with appropriate computations. Data AT name. Data regarding these three products for the fiscal year ending April 30 , is below. (Click on the icon for the data.) (Click on the icon for more information.) the nearest whole dollar.) Required 1. Allocate the $5,453,000 joint production cost to Amber, Bronze, and AT with Cobalt using the NRV method. 2. Identify which of the three joint products Augusta should sell at the splitoff point in the future and which of the three the company should process further to maximize operating income. Support your decisions with appropriate computations. Data
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started