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Decision Making #2-Sell or Process Further Joint Product Decision Lido manufactures A and B from a joint process cost = $18,000. Five thousand pounds of
Decision Making #2-Sell or Process Further Joint Product Decision Lido manufactures A and B from a joint process cost = $18,000. Five thousand pounds of A can be sold at split-off for $21 per pound or processed further at an additional cost of $9,000 and then sold for $22. Six thousand pounds of B can be sold at split-off for $12 per pound or processed further at an additional cost of $14,000 and later sold for $19. Required: Which products should be processed further or not? Why? Give the total dollar change in income for each product based on your recommendation. Make sure you show your work. Recommendation: Decision making #3-Use of Limited Resources-Singe Constraint Bush Manufacturing has the following labor hours available for producing M and N: 30,000 Total Direct labor hours available Consider the following information: M N Required Labor per unit in hours 4 3 Maximum demand in units 9,000 6,000 Contribution Margin per unit 12 6 Required: What is the optimal product mix(how many M and N should be produced)? Explain your answer and show computations
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