QUESTION 3 (15 MARKS. 27 MINUTES) Jatropha Namibian Products (UNP) is a company that processes jatropha plant seeds into bio diesel bio kerosene cosmetics and pesticides. The JNP process uses jatropha soods that are bought from farmers in the SADC region. Because of the diversity of suppliers, the seeds delivered are not of the same quality. However production of biodiesel and bio kerosene requires high quality Jatropha seeds. This causes JNP to first do a grading of all the seeds procured. The grading process results in a yield of 90% and poor quality seeds at 5%. The rest are impurities that are considered normal losses. The grading process costs N57 000 per month and N50.10 per kilo of jatropha seeds graded. The poor qually seeds are processed further at a cost of N$2 per kilo into cosmetic paste that is sold for N53 per kilo. After the grading, the high quality seeds are then ground to prepare them for extraction of bio diesel and blo kerosene. A liquefying chemical is applied to the ground seeds and the cost of this chemical is N$20 per litre Two litres of the chemical are required for every 1 000 kilos of ground seeded cooking oil. Since this chemical is a dissolving chemical, it does not add to the weight of the ground seeds. Other costs incurred in the processing department is fixed manufacturing overheads of N$10 000 per month. The average output from the processing department is 40% biodiesel and 60% bio kerosene. The biodiesel is sold as is to clients at Nss per lite while the (blo kerosene must be processed further to make it super refined for use in jet engines, The costs relating to the further processing of bio kerosene amount to N$0.30 per lite and the output of the further processing is 90% of refined blo kerosene, which is sold at NS4.50 per litre 10% of the output is a waste product that is sold at N$5 per litre as a pesticide after further processing costs of N$3 per litre and fixed cost of N$9 977 per month has been incurred. It is company policy to value inventory on the basis of First In, First Out (FIFO) and to deduct the net realisable value (NRV) of by products from the joint productions costs. Joint costs are allocated to joint products using tho NRV method The following transpired in the month of September 20213 500 000 kilo of jatropha seeds were purchased at N$0.50 per kilo Page 3 of 7 The sales were as follows: Bio-diesel 160 000 litre Refined bio kerosene 260 000 litre Cosmetic paste (by product) 20 000 litre Pesticides (by product) 25 000 litre Note: 1 kilo = 1 litre, therefore 1 000 kilos of input (Jatropha seeds) yield 1 000 litres of output. The only opening inventory was 30 000 litres of bio kerosene valued at N$0.80 per litre. There was no beginning or closing inventory work-in-process on hand. REQUIRED: Marks Sub- Total Total 9 9 N 11 3.1 Prepare a schedule showing the joints costs allocated to the joint products for September 2021 3.2 Determine the production cost per unit for each of the two joint products for September 2021 (round to two decimal places) 3.3 Calculate the gross profit per joint product for September 2021 (round total values to the nearest NS) Total 4 15 15
