QUESTION 2 Harum Manis Bhd. grows, processes, packages, and sells three mango products: slices that are used in frozen pies, mango jam, and mango juice. The outside skin of the mango, which is removed in the cutting department and processed as animal feed, is treated as a by-product. Harum Manis uses the net realizable value method to assign costs of the joint process to its main products. The mango skin by-product net realizable value is used to reduce the joint production costs prior to allocation to the main products.

Details of Harum Manis' production process follow: ? The cutting department washes the mangoes and removes the outside skin. The department then cores and trims the mangoes for slicing. At this point, each of the three main products and the by-product are recognizable. Each product is then transferred to the next department for final processing. ? The slicing department receives the trimmed mangos and slices and freezes them. Any juice generated during the slicing operation is frozen with the slices. ? The crushing department trims pieces of mango and processes them into mango jam. The juice generated during this operation is used in the mango jam. ? The juicing department pulverizes the core and any surplus mango from the cutting department into a liquid. This department experiences a loss equal to 8 percent of the weight of the good output produced. ? The feed department chops the outside skin into animal food and packages it. A total of 270,000 kgs of mangoes entered the cutting department during November. The following information shows the costs incurred in each department, the proportion by weight (based on kgs) transferred to the four final processing departments, and the selling price of each end product. Assume no beginning or ending inventory of mango slices, jam, or juice.

Proportion of Product by Weight Transferred to Selling Price per kg of Department Costs Incurred Departments Final Product Cutting RM 60,000 Slicing 11,280 33 % RM 0.80 Crushing 8,550 30 % 0.55 Juicing 3,000 27% 0.40 Feed 700 10 % 0.10 Total RM 83,530 100 %