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Peter Piper produces three types of jam. APPLE, BANANA, and CHICO. These jams come from a joint process, each of which can be sold immediately
Peter Piper produces three types of jam. APPLE, BANANA, and CHICO. These jams come from a joint process, each of which can be sold immediately or processed further. Monthly output is 50,000 jar; 50% is A, 30% is B, and 20% is C. You have the following information.
APPLE | BANANA | CHICO | |
Per-jar split-off price | 8.00 | 9.00 | 6.00 |
Per-jar price after further processing | 13.00 | 15.00 | 12.00 |
Per-jar variable cost of further processing | 4.00 | 2.00 | 4.00 |
Avoidable direct fixed costs of further processing, per month | 35,000.00 | 45,000.00 | 18,000.00 |
Unavoidable direct fixed costs of further processing, per month | 18,000.00 | 40,000.00 | 7,000.00 |
How much is the increment profit or (loss) of each product if sold at split off?
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