Mickey Company Manufactures Three Joint Products: X, Y, and Z

question 29

Essay

Mickey Company manufactures three joint products: X, Y, and Z. The cost of the joint process is £30,000. Information about the three products follows: $$\begin{array} { l r r r } & \mathrm { X } & \mathrm { Y } & { \mathrm { Z } } \\\text { Anticipated production } & 5,600 \mathrm { kgs } & 10,000 \mathrm { kgs } & 2,500 \mathrm { kgs } . \\\text { Selling price/kg. at split-off } & £ 2.00 & £ 1.00 & £ 3.00 \\\text { Additional processing costs/kg. } & & & \\ \text { after split-off (all variable) }& £ 1.50 & £ 1.25 & £ .75 \\\text { Selling price/kg. after } & & & \\ \text { further processing }& £ 2.50 & £ 3.75 & £ 6.25 \\\text { Allocated joint costs }& £ 12,000 & £ 10,500 & £ 7,500\end{array}$$
a.Determine whether each product should be sold at split-off or processed further. Show all supporting calculations in good form.
b.Determine the firm's income if the firm processed all three products beyond split-off.

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Definitions:

Urban Residents

Individuals who live within the densely populated areas that are characteristic of cities or towns.

Developing Economies

Nations or regions experiencing rapid growth and industrialization, often characterized by lower income levels compared to developed countries.

Suicide Rates

The proportion of individuals within a given population who die by suicide over a specific period.

Social Change

signifies the transformation over time of cultural values, norms, institutions, and structures within a society.