Questions Numbers 6#

Work out the estimated pre-separation cost per

tonne of by-products Y and Z, from the following data:

Costs of manufacture before separation:

$28,00,000.

Main product is X. There are two by-products Y

and Z whose normal selling prices are as under:

Sales price of Y: $500 per tonne; Sales price of Z:

$800 per tonne

Selling and distribution expenses have been

estimated to be 25% of selling price and the net

profit is expected to be 10% of selling price. Costs

to manufacture each tonne after separation from

the main products are:

$95 for by-product Y; $ 145 for by-product Z.

Assume equal weight for Y and Z.