Chineke Ltd manufactures three joint products and one by-product (Dee) in a single process. The following are the actual results for March 2019:
|Ayee Units||Bee Units||Cee Units||Dee Units|
|Production at 100% capacity||20 000||25 000||10 000||2 000|
All joint products can be processed further into a superior product namely: Super Aye, Super Bee and Super Cee. Due to strict quality control at the end of the production process, a rejection of 10% of the final product will occur if further processing is done after the split-off point.
The following information is applicable if products are processed further:
|Super Ayee (N$)||Super Bee (N$)||Super Cee (N$)|
|Selling price per unit||20||15||25|
|Additional processing costs||4||4||5|
Costs incurred in the joint process were:
Direct materials N$285 500
Direct labour N$143 100
Manufacturing overheads N$95 400
Note: By-products are sold for N$3 per unit.
Calculate the profit attributed to product Super Bee if the total production is sold and the company uses the physical standard method to allocate joint cost is (round off to a whole number) (Assume that a regular market exists for the by-product):
Leave an answer