can you please explain in as much detail as possible?
Integrative Case 11-79. Elfect of Cost Alecation on Pricing and Nakeverus-Bwy Decisions (@) 10O113,@4) As-Coop is a larye furm cooperative with a number of agrieuleturerelated manufacturing and serviec divisions. As a cooperative, it pays no Federal income taves. The company owns a fertilizer plant that processes and mixes petrochemical compounds isto three brands of agriculural fertilrer: Greenup. Maintane, and Winterizer. The three brands differ with respect to selline price ard the proportional content of basic chemicals. Ag-Coop's Fertiluer Manufacturing Division transfers the completed product to the cooperative's Retal Sales Dovision at a price based on the cost of each type of fertilizer plas a markap. The Manufacturiag Division is completely automated so that the only coss it incurs are the costs of the petrocheraical feedstocks plus overhead that is considered tixed. The primary feedstock costs $1.50 per pound. Each 100 pounds of fecdstock can produce either of the followieg mixtures of fertilizer: Production is limited to the 750,000 kilowatthours monthly capacity of the dehydrator. Due to different ehemical makeup. each brand of fortilizer requires different dehydrator use. Dehydrator asage in kilowatt thours per pound of product follows: Production is limited to the 750,000 kilowatt hours monthly capacity of the dehydrator. Due to different chemical makeup, each brand of fertilizet requires different dehydrator use. Dehydrator asage in kilowatthours per pound of product follows: Fase 541 Monthly fixed costs are $81,250. The company eurrently is producing aceording to cutput schedule A. Joint production conts including fixed overhead are allocated to each product on the basis of weight. The fertilizer is packed into to0-pousd bugs for sale in the cooperative's retail stores. The sales price for each product charged by the eooperative's Retail Sales Division follows: Setliag expenses are 20 pescent of the sales price. The Retail Sales Division manager has complained that the prices charged by the Manufacturing Division are exsessive and that he would prefer to perchase from another supolier. The Manufacturing Division manager argues that the processing mix was determined based oe a careful analysis of the costs of each product compared to the prices changed by the Retail Sales Division. Reqwind Requind a. Assume that joint production costs including fixed overthead are allocated to each product on the basis of weight. What is the cost per pound of each product, including fixed overhead and the feedstock cost of $1.50 per pound, given the current production schedule? b. Assume that joint production costs including fixed overthead are allocated to each product on the basis of net realizable value if sold through the cooperative's Retail Sales Division. What is the allocated cost per pound of each product, given the current production schedule? c. Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. Which of the two production schedules, A or B, produces the higher operating profit to the firm as a whole? d. Would your answer to requirement (e) be different if joint production costs including fixed overhead were allocated to each product on the basis of net realizable value? If so, by how much
