Walters Company: Process further? Costing involved.
Not what you're looking for?
Walters Company produces 15,000 pounds of Product A and 30,000 pounds of Product B each week by incurring a joint cost of $400,000. These two products can be sold as is or processed further. Further processing of either product does not delay the production of subsequent batches of the joint product. Data regarding these two products are as follows:
Product A Product B
Selling price per pound without further processing $12.00 $9.00
Selling price per pound with further processing $15.00 $11.00
Total separate weekly variable cost of further processing $50,000 $45,000
To maximize Walters Company's manufacturing contribution margin, how much total separate variable costs of further processing should be incurred each week?
Purchase this Solution
Solution Summary
This is a strange question because it is indirect. They don't ask the actual optimal decision, just how much processing costs should be incurred. Attached is the schedule to analyze the optimal decision and therefore the processing costs that will "pay off."
Solution Preview
This is a strange question because it is indirect. They don't ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
Recent Feedback
- "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
- "Thank, this is more clear to me now."
- "Awesome job! "
- "ty"
- "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Basics of corporate finance
These questions will test you on your knowledge of finance.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.