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the poison chemical company produces two joint products,alash and pottum ,from the same process.joint processng costs of $150000 are incurred up to the split up point,when 100000 units of alash and 50000 units of pottum are produced.The s.p. at split up poiny are $1.25 per unit for pottum.
The units of alash could be further processed to produce 60000 units of a new chemical ,alashplus,but at an extra fixed cost of $20000 and variable cost of 30c per unit of input.The s.p. of alashplus would be $3.25 per unit.
should the company sell alash or alashplus?
what is 30c ,sir?
30c is the extra cost per unit of doing more work on Alash after it leaves the joint process and is turned into Alashplus.
Joint cost questions are rarely asked in Paper PM because they areexamined in Paper MA. You can find full lectures on Process costing: Joint Costs in the Paper MA section of this website.