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Please answer both questions. QUESTION 19 Farraige Ltd produces skincare products using local harvested seaweed. It has been approached by a new customer and asked
Please answer both questions.
QUESTION 19 Farraige Ltd produces skincare products using local harvested seaweed. It has been approached by a new customer and asked to produce a special order facial oil. If Farraige undertake the project, they will need to utilise a new piece of equipment for the project. They currently have a similar piece of equipment which is used to produce a cleanser in Division A that could be transferred onto this special order but it would need to be modified at a cost of 5,000. This machine would then need to be replaced in Division A at a cost of 20,000. The alternative is to leave the machinery in Division A and purchase the required machine for 35,000 What is the relevant cost of the machine for costing this special order? a. 25,000 b. 35,000 c. 5,000 d. 60,000 QUESTION 20 Axel Ltd produces three products (X, Y and Z) and allocates joint costs using the sales value split-off method. The joint costs amounted to 500,000 Product Sales Price per unit Units Produced 160,000 5 12.50 40,000 80,000 2.50 Calculate the joint cost to be allocated to Product X: a. 300,000 b. 500,000 C. 250,000 d. 150,000Step by Step Solution
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