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.