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ABC Ltd manufactures two products, Nupod and Zyratec, out of a joint process. The joint costs incurred are $500,000 for a standard production run that generates 100,000 litres of Nupod and 75,000 litres of Zyratec. Nupod sells for $7.00 per litre while Zyratec sells for $10.50 per litre.
Required
Question 1: If there are no additional processing costs incurred after the split-off point, calculate, for each production run, the amount of joint cost allocated to Nupod on a physical units basis.
Question 2: If there are no additional processing costs incurred after the split-off point, calculate, for each production run, the amount of joint cost allocated to Zyratec on a relative sales value basis.
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