Question 3: Jameel Ltd produces three joint products A, B and C, from a common process. Annual costs for the joint process are as follows: E Direct materials Direct wages Variable overheads (150% of direct wages) Fixed overheads 155,000 60,000 90,000 90,000 The budgeted outputs and selling prices at separation point are: Production Prices Tons per ton A 100 B 2,000 1,000 500 150 200 Production capacity is available to process further any one or all of the products. Additional labour and materials would be required in each case, and the following estimates have been prepared of costs and sales values if further processing is carried out. A B C 500 Quantities (tons) Additional materials 2,000 12,000 12,000 1,000 15,000 10,000 Additional direct wages 10,000 10,000 Total sales value (after further processing) 240,000 210,000 150,000 Required: The management wishes to know which products should be sold or processed further, and the difference in the anticipated trading results between processing and selling at separation point