Question 1 products. For inventory costing purposes, any The idea here is to construct a "Produced systematic cost allocation system will do. The basic
As/Sold As Matrix" (400,000 x 400,000). Obviously, idea of the relative sales value scheme is that all sales the possible combinations are endless, so how does one should show gross margin percent equal to the average choose a "best" approach? The "best" solution is to gross margin percent across the full joint product set. start with demand for the highest value product (405) This average is 19% [(246 - 200) (246)]. This does and work back unsold production to the …show more content…
3,000 402's as 401's. This really doesn't affect management decisions. In Unitron, the "working rule" for sales persons was easy: always accept the order if you can Question 5 fill it without going up more than one product level. There is no simple answer to the "proper"
Let production worry about when to run the next batch. allocation method. The impact may be purely behavioral. Equal unit costs will discourage selling
Question 4 low-end products because of their lower margins. Yet, The toy company may be forcing Unitron to the biggest demand is in the lower end of the product change its long-term view on joint products and by- line. Equalizing the gross profit margins across all products. The "seconds" are already large to be products would send the message that we must sell as considered a by-product (sales of at least 35,000 units a many of all the units as we can and substitutions are ok. year). They are only exceeded by the 402 product line But we don't want to