Question
Mixer Industries produces three products: ALT, BAT, and COP. Initially they are processed from the same raw material and then, after split-off are processed further.
Mixer Industries produces three products: ALT, BAT, and COP. Initially they are processed from the same raw material and then, after split-off are processed further. After processing in department A each 100 pounds of raw materials, yields 35 pounds of mush which is transferred to Department Z and 65 pounds goop which is transferred to department M. Department Z processes the mush into ALT. Department M processes the goop into 40 pounds of BAT, 20 pounds of COP, and 5 pounds of waste material. Additional information is as follows: ALT BAT COP Final sales price per pound $9.00 $6.00 $0.75 Cost of processing beyond split-off per pound $3.00 ? ? During June 2022, Department A used 100,000 pounds of raw materials. Department A processing costs were $330,000 and department M incurred $170,000 of processing costs during June 2022. The landfill charged $0.15 per pound to dispose of the waste material. Mixer Industries has elected to allocate joint costs based on the weight of main products produced in the process.
A)Determine the inventory values (on a per pound basis) for the ALT and BAT produced in June 2022. Explain any judgments used to determine these values.
B) Storm Industries has offered to purchase 40,000 pounds of mush (the output of department A which is processed into ALT) for $230,000. Should this offer be accepted? Explain
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