Ardmore Company Produces Two Main Products Jointly, a and B

question 67

Essay

Ardmore Company produces two main products jointly, A and B, and C, which is a by-product of B. A and B are produced from the same raw material. C is manufactured from the residue of the process creating B.

Costs before separation are apportioned between the two main products by the net realizable value method. The net revenue realized from the sale of C is deducted from the cost of B. Data for April were as follows:

Costs before separation	$200,000
Costs after separation:
A	50,000
B	32,000
C	4,000
Production for April, in pounds:
A	800,000
B	200,000
C	20,000
Sales for April:
A	640,000 pounds @ $.4375
B	180,000 pounds @ .65
C	20,000 pounds @ .30

Required: Determine the gross profit for April.

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Definitions:

Variable

An element, feature, or factor that is liable to vary or change, often used in mathematics, statistics, and scientific experiments to represent quantities or qualities that can assume different values.

Open Sentence

A mathematical or logical statement containing one or more variables that does not have a definitive truth value until the variables are specified.

Variable

An aspect, trait, or element that has the potential to change or differ.

Sentence

A sequence of words that is self-contained, typically featuring a subject and a verb, to deliver a statement, interrogative, exclamation, or imperative.