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Posted by: Homeworkhelp
Price Quoted by Student: $3
Posted On: 2011-02-17 06:06:03
 
Question

Kelp Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder.

 

Joint Products

 

Kelp Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these products can either be sold at the split-off point or be processed further. If they are processed further, the resulting products can be sold as delicacies to health food stores. Cost and revenue information is as follows:

 

                                                            Sales Value and Additional

                                                            Costs if Processed Further

 

Product           Pounds             Sales Value           Final Sales Value         Additional Cost                 Produced           @ Split-off   

 

Sea Tea…..      9,000                 $60,000                      $90,000                       $35,000

Sea Paste….    4,000                  $80,000                    $160,000                       $50,000

Sea Powder… 2,000                 $70,000                     $85,000                        $14,000

 

INSTRUCTIONS

a.)    Which products should Kelp process beyond the split-off point?

b.)    At what price per pound would it be advantageous for Kelp Company to sell Sea Paste at the split-off point rather than process it further?


Solutions
SOLUTION KELP COMPANY Computations &nbs
Price $3
Attachment 1: Kelp Company produces three.doc
Solution Posted By: Homeworkhelp    Posted on: 17-02-2011