JB Ltd. produces four joint products, A, B, C and D, all of
which emerge from the processing of one raw material. The following
are the relevant data:
Production for the period:
Joint Product
Number of Units
Selling Price per Unit Rs
A
500
18.00
B
900
8.00
C
400
4.00
D
200
11.00
The company budgets for a profit of 10% on sales value. The
other estimated costs are:
Carriage inwards: Rs.1, 000
Direct wages: Rs.3, 000
Manufacturing overheads: Rs.2, 000
Administration overheads: 10% of the sales value
You are required to,
I] Calculate the maximum price that may be paid for the raw
material
II] Prepare a comprehensive cost statement for each of the
products allocating the materials and other costs based up on:
Number of units and Sales value.