Orange Paper Company processes wood pulp into two products.During April the joint costs of processing were $132,000.Production and sales value information for the month were as follows:
Paper sells for $2.65 a kilogram and cardboard sells for $3.40 a kilogram.There were no beginning or ending inventories for April.Required:
1.Determine the amounts to be allocated to each product using the:
2.If the cardboard is sold at the splitoff point then the post splitoff factory capacity can be renovated and leased for the year.The cost of the renovation is budgeted at $125,000 and the annual lease revenue will be $165,000.Determine if it is more profitable for the cardboard to be sold at the splitoff point or at the end of production.
Definitions:
Industrial Union
A labor union whose membership is composed of workers from various trades within a particular industry.
Inclusive Unionism
A form of unionism aimed at representing a broad spectrum of workers, including those of different occupations, industries, and demographic backgrounds.
Minimum Wage
The lowest wage that employers may legally pay for an hour of work.
Labor Shortages
Labor shortages occur when employers have difficulty filling positions due to a lack of available, qualified candidates.
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