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Gemstarz Ltd. manufactures the joint products, Diamonz and Emerald. Diamonz sells for $22.00 per unit, whereas Emerald sells for $50.00 per unit. Total joint processing
Gemstarz Ltd. manufactures the joint products, Diamonz and Emerald. Diamonz sells for $22.00 per unit, whereas Emerald sells for $50.00 per unit. Total joint processing costs were $3,300,000. The 2 products require further processing beyond the split-off point. The following information relates to the 2 products : Diamonz Emeralz Production (units) 150,000 125,000 Separable costs $585,000 $900,000 Required : (a) Determine the total cost per unit of each of the products using the physical method. (Show all workings. You may prepare your workings using WORD or EXCEL) (1 mark) (b) Determine the total cost per unit of each of the products using the net realisable value method. (Show all workings. You may prepare your workings using WORD or EXCEL) (3 marks) (c) Determine the total cost per unit of each of the products using the constant gross margin method. (Show all workings. You may prepare your workings using WORD or EXCEL) (2 marks) (d) "Emerald" could be further processed into "Garnez" for an additional cost of $18.00 per unit. "Garnez" would sell for $70.00 per unit. Should the company produce "Garnez"? Show the necessary computation to justify your decision. (Show all workings. You may prepare your workings using WORD or EXCEL) (2 marks)(a) Check digits / indicative solutions : Diamonz Emeralz Joint costs allocated ($) Total cost per unit ($) (b) Diamonz Emeralz NRV ($) Joint costs allocated ($) Total cost per unit ($) (c) Gross Profit (%) Diamonz Emeralz Joint costs allocated ($) Total cost per unit ($) (d) Garnez Incremental gain / (loss)
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