GETSNYA manufactures two industrial products in a joint process. In January, 10,000 gallons of input costing P120,000 were processed at a cost of P300,000. The joint process resulted in 8,000 pounds of Product One and 2,000 pounds of Product Two. Product One sells at P50 per pound and Product Two sells for P100 per pound. Management generally processes each of these chemicals further to produce more refined chemical products. Product One is processed separately at a cost of P10 per pound, the resulting product sells for P70 per pound. Product Two is processed separately at a cost of P30 per pound, the resulting product sells for P190 per pound. Assuming that management is considering an opportunity to process Product Two into a new product. The separable processing will cost P80 per pound. Packaging costs for the new product is projected to be P12 per pound, and anticipated sales price is P260 per pound. Should Product Two be processed further into a new product? a. Yes, because of an advantage of P20,000 b. Yes, because of an advantage of P44,000 c. No, because of a disadvantage of P44,000 d. No, because of a disadvantage of P20,000
GETSNYA manufactures two industrial products in a joint process. In January, 10,000 gallons of input costing P120,000 were processed at a cost of P300,000. The joint process resulted in 8,000 pounds of Product One and 2,000 pounds of Product Two. Product One sells at P50 per pound and Product Two sells for P100 per pound. Management generally processes each of these chemicals further to produce more refined chemical products. Product One is processed separately at a cost of P10 per pound, the resulting product sells for P70 per pound. Product Two is processed separately at a cost of P30 per pound, the resulting product sells for P190 per pound.
Assuming that management is considering an opportunity to process Product Two into a new product. The separable
a. Yes, because of an advantage of P20,000
b. Yes, because of an advantage of P44,000
c. No, because of a disadvantage of P44,000
d. No, because of a disadvantage of P20,000
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