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LMR1006.
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- March 1, 2024 at 4:51 am #701508
https://cbept.accaglobal.com/tr-candidate/mark/65de530eff08b03966e93a27
Yoyo Co manufactures a single product, the Yog, which is made from a mix of two ingredients: X and Y. Yoyo Co accounts for environmental costs using input/output analysis.
Ingredient X costs $15500 per tonne and ingredient Y costs $825 per tonne. Any ingredients which are wasted in the production process must be disposed of at a cost of $150 per tonne.
July’s production run used 24 tonnes of ingredient X and 36 tonnes of ingredient B. Total output of Yog was 57 tonnes.
What is the environmental cost of July’s production run?
Above is the question- not sure how Unit price of Input A is $550 per ton is been used for working ?
Below is the answer from Mark sheet.
The environmental cost is the cost of the 3 tonnes wastage ($2,145) plus the cost of its disposal ($450).
WORKING
$ per tonne
Tonnes
Total cost
Input A
550
24
13200
Input B
825
36
29700
60
42900
Wastage
-3
-2145
Output
57
Disposal cost
150
-450
Environmental cost
-2595
March 1, 2024 at 8:07 am #701524Do not send me a link
Because I am not you and therefore cannot access it
I think they have a typo in the questionThe environmental cost of July’s production run is calculated by adding the cost of the 3 tonnes of wastage ($2,145) to the cost of its disposal ($450).
The working shows that the unit price of Input A is $550 per tonne, and 24 tonnes of Input A were used, resulting in a total cost of $13,200. So I think it should say that in the question $550 rather than $15500 and A not X
Similarly, the unit price of Input B is $825 per tonne, and 36 tonnes of Input B were used, resulting in a total cost of $29,700. So that is correct
The total cost of inputs A and B is $42,900.
The wastage is 3 tonnes, which incurs a cost of -$2,145.
The output of Yog is 57 tonnes.
The disposal cost for the wastage is $150 per tonne, resulting in a total disposal cost of -$450.Therefore, the environmental cost of July’s production run is -$2,595.
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