The company produces 3 joint products as I, II, and III which can be sold at the split off point or further processed to be final products as AI, AII, and AIII, respectively. For the further process, the company has to use Material A (A). The relevant details are shown as Table 1.

Table 1: Data for joint products, final products, selling prices, costs, and market demand.

1) Which product (s) among I, II, and III should be further processed and why ?

2) How many units of each product among I, II, III, AI, AII, and AIII should be produced in order to satisfy maximum benefit for the company (5 points)?

Per units Capacity (units) Market Demend (units) Selling Price at split off point (5) Joint Cost Allocation Joint Products I II 20,000.00 20,000.00 20,000.00 20,000.00 200.00 500.00 74.00 185.00 Final Products AI AII 400.00 1,200.00 III 20,000.00 20,000.00 650.00 241.00 Per units Selling Price as final product (5) AIII 1,000.00 Separated Cost: Variable Cost (5) Allocated Fixed Cost (5) 110.00 100.00 250.00 200.00 360.00 100.00 Market Demand (units) Consuming rate of A per unit produced (units) Stock of A (units) 20,000.00 0.20 10,000.00 15,000.00 0.50 8,000.00 0.10