QUESTION 2 25 MARKS Green Enterprise Ltd is in the business of recycling used automotive batteries and has seen a huges in business due to the recent focus on environmental awareness. Green Enterprise Ltd purchases purchases used batteries from suppliers, which are then transported to their premises at the company's expense. The total transport costs for the month amounted to N$ 12 000. Green Enterprise Ltd mainly uses the plastic casings and covers of the batteries to manufacture plastic crates and shopping bags. A typical battery weighs six kilograms and consists of the following components: Plastic casings and covers 80% Battery acid 15% Various small metal parts 5% unce at the processing plant, batteries are forwarded to the dismantling department. During this process, the batteries are separated into their different components by highly specialised employees. These employees are paid a wage of N$ 25 for every battery separated. The specialised equipment used in this process is leased from the United States at a cost of N$ 25 000 per month. The metal parts are cast into 1kg blocks at a cost of N$ 2.50 per block, and then sold to the dental industry for the manufacture of tooth fillings. The acid is bottled in 5ke containers at a fixed monthly cost of NSO 750 and sold to schools for use in science experiments. The plastic casings and covers are forwarded to the furnace department for further processing. The battery acid and metal parts are regarded as by- products in the process. Once in the furnace department, the plastic is heated at extreme temperatures until the mixture obtains a liquid consistency. The furnace consumes an average of N$ 20 000 worth of electricity per month. The mixture is then cleaned to remove any remaining impurities, before 70% of the mixture is used to manufacture crates and the remaining 30% of the mixture is used to manufacture shopping bags. It costs the company N$ 2 to clean a kilogram of the mixture. A hardening agent is added to the crate mixture before it is moulded. The hardening agent costs N$ 2.75 per kilogram plastic moulded. The moulding costs for the month for shopping bags and crates were N$ 118 000 and N$ 243 000, respectively. Due to the kilogram weight nature of the products, both shopping up and rates we package and some During October 2017, a total of 5 Cob e ndast an average price of N$ 50 per me The following sales information is aplicable for October 2017: Sales quantity Shopping bags 8 500 llograms Crates 19 000 kilograms Sales price N$ 65/kg N$ 44/ N$ 20 per container NS 7 per block Acid (By-Product) 800 containers Metal blocks (By-Product) 1 200 blocks On 1 October 2017, there were 2 800 kilograms of shopping bags in stock, val at NS 56 420. There were also 4 200 kilograms of crates in stock, valued at NS 45 990. There were no add or metal Wacks in stock at the beginning of the month. It is the policy of Green Enterprise Ltd to deduct the net realisable value of by-products manu from the production cost of the joint products. U Net realisable value 2.2 Prepare a schedule showing the allocation of joint cost to the joint products for each of the following methods: a) The physical units method. b) The net realisable value method. Page 11 of 14 2.3 Metal is currently, after being cast into 1kg blocks, sold at R7 per block. The metal blocks can be hand carved into key rings. Each block of metal can yield 20 key rings, but an additional carving cost of R66 250 will have to be incurred. A key ring will sell for R2.50. Advise management whether key rings should be carved from the metal blocks. Show all calculations. QUESTION 2 25 MARKS Green Enterprise Ltd is in the business of recycling used automotive batteries and has seen a huges in business due to the recent focus on environmental awareness. Green Enterprise Ltd purchases purchases used batteries from suppliers, which are then transported to their premises at the company's expense. The total transport costs for the month amounted to N$ 12 000. Green Enterprise Ltd mainly uses the plastic casings and covers of the batteries to manufacture plastic crates and shopping bags. A typical battery weighs six kilograms and consists of the following components: Plastic casings and covers 80% Battery acid 15% Various small metal parts 5% unce at the processing plant, batteries are forwarded to the dismantling department. During this process, the batteries are separated into their different components by highly specialised employees. These employees are paid a wage of N$ 25 for every battery separated. The specialised equipment used in this process is leased from the United States at a cost of N$ 25 000 per month. The metal parts are cast into 1kg blocks at a cost of N$ 2.50 per block, and then sold to the dental industry for the manufacture of tooth fillings. The acid is bottled in 5ke containers at a fixed monthly cost of NSO 750 and sold to schools for use in science experiments. The plastic casings and covers are forwarded to the furnace department for further processing. The battery acid and metal parts are regarded as by- products in the process. Once in the furnace department, the plastic is heated at extreme temperatures until the mixture obtains a liquid consistency. The furnace consumes an average of N$ 20 000 worth of electricity per month. The mixture is then cleaned to remove any remaining impurities, before 70% of the mixture is used to manufacture crates and the remaining 30% of the mixture is used to manufacture shopping bags. It costs the company N$ 2 to clean a kilogram of the mixture. A hardening agent is added to the crate mixture before it is moulded. The hardening agent costs N$ 2.75 per kilogram plastic moulded. The moulding costs for the month for shopping bags and crates were N$ 118 000 and N$ 243 000, respectively. Due to the kilogram weight nature of the products, both shopping up and rates we package and some During October 2017, a total of 5 Cob e ndast an average price of N$ 50 per me The following sales information is aplicable for October 2017: Sales quantity Shopping bags 8 500 llograms Crates 19 000 kilograms Sales price N$ 65/kg N$ 44/ N$ 20 per container NS 7 per block Acid (By-Product) 800 containers Metal blocks (By-Product) 1 200 blocks On 1 October 2017, there were 2 800 kilograms of shopping bags in stock, val at NS 56 420. There were also 4 200 kilograms of crates in stock, valued at NS 45 990. There were no add or metal Wacks in stock at the beginning of the month. It is the policy of Green Enterprise Ltd to deduct the net realisable value of by-products manu from the production cost of the joint products. U Net realisable value 2.2 Prepare a schedule showing the allocation of joint cost to the joint products for each of the following methods: a) The physical units method. b) The net realisable value method. Page 11 of 14 2.3 Metal is currently, after being cast into 1kg blocks, sold at R7 per block. The metal blocks can be hand carved into key rings. Each block of metal can yield 20 key rings, but an additional carving cost of R66 250 will have to be incurred. A key ring will sell for R2.50. Advise management whether key rings should be carved from the metal blocks. Show all calculations