FilletsPieces Yield (kgs)2,1001,500 Revenue (disposal cost) per kilogram73.5 Separable processing21.5 Fresh fish can be quick frozen with (separable cost and selling cost of $1.00 per kg, and (a) Fresh Fish Revenue generated from fresh fish(2100x7)14,700 Further processing costs(2100x2)4,200 Fixed costs0 Profit(14700-4200-0)10,500 The fillets should processed further and quick-frozen and then sold, as it more profitab (b) Assuming joint cost is $7,500 Physical output method YieldWeight Fillets2,10058.33% Pieces1,50041.67% Total3,600 NRV method YieldFull Sales Price Fillets2,1007 Pieces1,5003.5 Total3,600 (2100+1500) Constant gross margin % method FilletsPieces 14,7005,250 Less: separable costs4,2002,250 Less: Joint Cost(2x2100)(1.5x1500) Gross Margin Gross Margin % FilletsPieces Final sales value of total production 14,7005,250 4,4211,579Final sales value of total production (2100x7); (1500x3.5) ; (6800x-0.3) Less: Gross Margin (using GP %) (14700x- 62%); (5250x-62%);(2040x-62%)
Total production costs19,1216,829 (14700-9061)(5250-3236) Step 3: Less: Separable costs (2100x2) ; (1500x1.5)42002250 Joint costs allocated14,9214,579 (19121-4200)(6829-2250)
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