Question

total 4 do baw ducken 98350 Processing cost *1352 J9702 It Jordan chicken purchases chickens from tamers and processes them into two different paludts: chicken drumsticks and chicken sterk from a standard batch of 15,000 pounds of raw chicken that costs $8,350, the I company produces tunads: 2.000 bands of drumsticks Hand 4000 paunds of breast for a processing cost of '1 352 The chicken breast is fucher processed into 3.200 paunds of steak for a processing cost of $2,300. The market price of drumsticks per paund is $150 and the market price per paind of chicken steak is 84.30. If Jadan daided Ito Sell chicken breast instead of chicken steak, the price per pound would be $240. Assuming Marto further processes chicken breasts into Chicken steak, has much will the profit increase? Lusing relative market values as the allocation base

Answer 1

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Jorden
Calculation of current profits	Drumstick	Breasts	Total	Note
Pounds produced	2,000.00	4,000.00		A
Sell price	1.50	2.40		B
Total Sales	3,000.00	9,600.00	12,600.00	C=B*A
Less:
Cost of Raw chicken (in 3000:9600)	1,988.10	6,361.90	8,350.00
Net Profit	1,011.90	3,238.10	4,250.00	D
Calculation of current profits	Drumstick	Steak	Total	Note
Pounds produced	2,000.00	4,000.00		A
Sell price	1.50	4.30		B
Total Sales	3,000.00	17,200.00	20,200.00	C=B*A
Less:
Cost of Raw chicken (in 3000:9600)	1,988.10	11,398.41	13,386.51
Further Processing costs		1,352.00	1,352.00
Net Profit	1,011.90	4,449.59	5,461.49	E
Profit will increase by			1,211.49	F=E-D