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HW5 1

- The document discusses a company, Julius International, that produces two products, JI and JII. The products can be sold as-is or further processed. - Further processing increases the selling price but also incurs additional variable costs for each product. - To maximize contribution margin, the company needs to determine the optimal level of further processing for each product by comparing income with and without processing after considering the separate variable costs of further processing.

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Winoah Hubalde
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808 views4 pages

HW5 1

- The document discusses a company, Julius International, that produces two products, JI and JII. The products can be sold as-is or further processed. - Further processing increases the selling price but also incurs additional variable costs for each product. - To maximize contribution margin, the company needs to determine the optimal level of further processing for each product by comparing income with and without processing after considering the separate variable costs of further processing.

Uploaded by

Winoah Hubalde
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Without Further Processing

Quantity
x Selling Price
Variable Income without Processing

With Further Processing

Quantity
x Selling Price
Total
Less: Separate Weekly Variable Cost of Further
Variable Income with Further Processing

Julius International produces weekly 15,000 units of Product JI and 30,000 units of JII for which P800,000 common variable co
JI
Unit selling price without further processing P24
Unit selling price with further processing P30
Total separate weekly variable costs of further processing P100,000
To maximize Julius’ manufacturing contribution margin, the total separate variable costs of further processing that should be i
JI JII
15,000 30,000
24 18
ncome without Processing 360000 540000

JI JII
15,000 30,000
30 22
450000 660000
rate Weekly Variable Cost of Further Processing 100000 90000
ncome with Further Processing 350000 570000

which P800,000 common variable costs are incurred. These two products can be sold as is or processed further.   Further processing of eit
JII
P18
P22
P90,000
of further processing that should be incurred each week are:
urther.   Further processing of either product does not delay the production of subsequent batches of the joint products.   Below are some
nt products.   Below are some information:

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