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Mission

Note - spreadsheet is attached and just needs to be filled in and answers completed from below

a. What alternative to sell or process further are available to Mission?
b. Compute the product costs for each main product in total and per unit for each alternative presented in requirement A.
c. Build your own spreadsheet to solve requirement B.
d. How can your spreadsheet be used to demonstrate the effect of changes in sales price or costs on Mission's decision to sell Product Y at split off or process it further?

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a. What alternative to sell or process further are available to Mission?
b. Compute the product costs for each main product in total and per unit for each alternative presented in requirement A.
c. Build your own spreadsheet to solve requirement B.
d. How can your spreadsheet be used to demonstrate the effect of changes in sales price or costs on Mission's decision to sell Product Y at split off or process it further?

Check Figure 9.41 c. Joint cost allocated to Product X for either option = $100,000

Product X Y Z Total
Quantity, liters 1,000,000 500,000 100,000 1,600,000
Sales price at splitoff $0.09 $0.05
No further processing - -
Further processing $20,000 $1,500
Sales price after further processing $0.10 $0.02
Joint processing cost $160,000
Alternative 1: I thought that one of the alternative is the sales of X & Y at splitoff but not Z since it has no value at the splitoff.
Sell X & Y at splitoff X Y Z Total
Sales value $90,000 $25,000 $- $115,000
Further processing cost - - - $-
NRV $90,000 $25,000 $- $115,000

Joint cost allocations X Y Z Total
Quantities 1,000,000 500,000 100,000 1,600,000
% ...

Solution Summary

This solution is comprised of a detailed explanation to answer what alternative to sell or process further are available to Mission, compute the product costs for each main product in total and per unit for each alternative presented in requirement A, build spreadsheet to solve requirement B, and how can your spreadsheet be used to demonstrate the effect of changes in sales price or costs on Mission's decision to sell Product Y at split off or process it further.

$2.19