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QUESTION- JP Itd produces three joint products-A, B and C - which are then further processed. It is normal practice for the company to apportion
QUESTION- JP Itd produces three joint products-A, B and C - which are then further processed. It is normal practice for the company to apportion all pre-separation costs on the basis of weight of output of each joint product. Data for the last period is as follows: Costs incurred up to separation point 9,600 Product A Product B Product C Output (kg) 100 60 80 E Costs incurred after separation 2,000 1,200 800 Point selling price per kg After further processing 50 80 60 At pre-separation point (estimate) 25 70 45 Requirements Prepare a statement showing the profit or loss mad by each product using the present method of apportioning pre- separation costs. Advise the management of JP Itd whether or not, on purely financial grounds, it should further process any of the three products
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