Ottawa Ltd -Refer to Figure 6-12

question 42

Multiple Choice

Ottawa Ltd. produces two products from a joint process. Information about the two joint products is as follows: $\begin{array}{lcc}&\text { Product } & \text { Product } \\&\mathrm{X} & \mathrm{Y}\\ \text { Anticipated production (in kgs) } & 2,000 &4,000\\ \text { Selling price per kg at split-off } & £ 30& £16 \\\text { Additi onal processing costs per } \mathrm{kg} \\\text { after split-off (all variable) } & £ 15& £30 \\\text { Selling price per kg after } & \\\text { further processing }&£40&£50 \end{array}$
-Refer to Figure 6-12. Which of Ottawa's joint products should be processed further?

• A)Product X only
• B)Product Y only
• C)both Product X and Product Y
• D)neither Product X nor Product Y

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Definitions:

Factory Overhead

Manufacturing costs that are not raw material or direct labor costs.

Raw Materials

The basic materials from which products are manufactured or made.

Corporate Headquarters

The main office or center of operations for a corporation, where key managerial and administrative activities are conducted.

LIFO Inventory Method

Last In, First Out, an inventory valuation method where the goods purchased last are the first to be sold.