Question No. 4

HASF Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative sales value at the end of the joint process.Additional information for HASF are as follows:

A B C Total

Units produced 12,000 8,000 4,000 24,000

Joint costs 144,000 60,000 36,000240,000

Sales value before additional processing 240,000 100,000 60,000400,000

Additional costs for further processing 28,000 20,000 12,000 60,000

Sales value if processed further 280,000 120,000 70,000470,000

Required:

a.Which, if any, of products A, B, and C should be processed further and then sold? (1 marks)

b.Keeping in view the answer of "part a", write down your critical feedback to support your answer(Word limit Max 200)(1 marks)

Question No. 5-1

In planning its operations for 2011 on the basis of a sales forecast of 6,000,000 ASF Inc. prepared the following estimated data Costs and Expenses

Variable Fixed

Direct Material 1,600,000

Labor 1,400,000

Factory overhead 600,000900,000

Selling expenses 240,000360,000

Administrative expenses60,000140,000

Required:

a.What would be the amount of sales at the breakeven point? (0.5 marks)

2,250,000

4,000,000

3,500,000

5,300,000

Question No. 5-2

HASF Corporation has fixed costs of 1,000,000 variable costs of 50 per units and a contribution margin ratio of 40% and no of units sold 20,000

Required:

a.Compute the following (1 marks)

Units sales price and unit's contribution margin for the above product

The sales volume in units required for company to earn an operating income of 100,000

The $ sales volume required for company to earn an operating income of 300,000

Question No. 5-3

For each of the three independent situations below computes the missing amounts (1.5 marks)

S/No.

Sales

Variable costs

Contribution margin per unit

Fixed costs

Operating income

Units sold

1

?

120,000

20

?

25,000

4,000

2

180,000

?

?

45,000

30,000

5,000

3

600,000

?

30

150,000

90,000

?