Case 1 London Company produces joint products Jens and Rats, together with by-product Bind. Jens is sold at split-off, whereas Rats and Bind undergo additional processing. Production data pertaining to these products for the year ended December 31, 2019 were as folows Jens Rats Bind Joint cost Total Variable 88.000 Fixed 148.000 Separable costs Variable S120.000 $ 3,000 123,000 Fixed 90.000 2.000 92,000 Production in pounds 50,000 40,000 10.000 100.000 Sales price per pound $ 4.00 S 1.10 7.50 There were no beginning or ending inventories No materials are spoiled in production. Variable costs change in direct proportion to production volume. Bind's net realizable value is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product Although 2019 performance could be repeated for 2020, London Company is considering possible operation of the plant at full capacity of 120,000 pounds. The relative proportion of each product's output with respect to cost behavior and production increases would be unchanged. Market surveys indicate that prices of Jens and Bind would have to be reduced to $3.47 and $0.90 respectively. Rat's expected price decline cannot be determined. Required: Items 1 through 15 represent data which would be used in production planning. For each item, compute the amount which would be used in making production decisions. Joint costs to be used in the calculation of total gross margin. 2. Separable costs used in the calculation of total gross margin. 3. Total gross margin. 4. Gross margin desired for Rats if joint costs are to be allocated using the gross margin method. 5. Joint costs allocated to Rats (gross margin method) 6. Joint costs allocated to Jens (gross margin method) 7. Total costs used in the calculation of gross margin 8. Gross margin on Jens. 9. Total contribution margin of all products combined. 10. Break-even point in pounds for all products combined. 11. Projected increase in production of Bind (in pounds) at full capacity. 12. Projected increase in production of Jens (in pounds) at full capacity. 13. Total projected pounds of production of Rats at full capacity. 14. Differential revenues in 2020 which would result from sales of Jens and Bind if production was at full capacity. 15. Differential costs which would be incurred in the production of Rats if production was at full capacity. on Rats. Case 1 London Company produces joint products Jens and Rats, together with by-product Bind. Jens is sold at split-off, whereas Rats and Bind undergo additional processing. Production data pertaining to these products for the year ended December 31, 2019 were as folows Jens Rats Bind Joint cost Total Variable 88.000 Fixed 148.000 Separable costs Variable S120.000 $ 3,000 123,000 Fixed 90.000 2.000 92,000 Production in pounds 50,000 40,000 10.000 100.000 Sales price per pound $ 4.00 S 1.10 7.50 There were no beginning or ending inventories No materials are spoiled in production. Variable costs change in direct proportion to production volume. Bind's net realizable value is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product Although 2019 performance could be repeated for 2020, London Company is considering possible operation of the plant at full capacity of 120,000 pounds. The relative proportion of each product's output with respect to cost behavior and production increases would be unchanged. Market surveys indicate that prices of Jens and Bind would have to be reduced to $3.47 and $0.90 respectively. Rat's expected price decline cannot be determined. Required: Items 1 through 15 represent data which would be used in production planning. For each item, compute the amount which would be used in making production decisions. Joint costs to be used in the calculation of total gross margin. 2. Separable costs used in the calculation of total gross margin. 3. Total gross margin. 4. Gross margin desired for Rats if joint costs are to be allocated using the gross margin method. 5. Joint costs allocated to Rats (gross margin method) 6. Joint costs allocated to Jens (gross margin method) 7. Total costs used in the calculation of gross margin 8. Gross margin on Jens. 9. Total contribution margin of all products combined. 10. Break-even point in pounds for all products combined. 11. Projected increase in production of Bind (in pounds) at full capacity. 12. Projected increase in production of Jens (in pounds) at full capacity. 13. Total projected pounds of production of Rats at full capacity. 14. Differential revenues in 2020 which would result from sales of Jens and Bind if production was at full capacity. 15. Differential costs which would be incurred in the production of Rats if production was at full capacity. on Rats