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In a chemical plant four different products viz. AB,BC,CD and DD emerge from the input of crude oil. Product AB can be sold immediately, but
In a chemical plant four different products viz. AB,BC,CD and DD emerge from the input of crude oil. Product AB can be sold immediately, but the remaining three products require further processing before they can be marketed. In a month 40,000 liters of crude oil were procured at a cost of Rs 30 per litre and processed at a cost of Rs 3 lakhs. The details of the output obtained, further processing cost, selling price per unit etc. are given below: Prepare: (a) Statement showing apportionment of joint cost on suitable basis and product-wise profitability statement. Follow net sales value at split off point. (b) If the company finds a market for CD at Rs63/kg without further processing, will it be advisable to accept it? Justify your answer with proper comparative analysis
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