Question 192 pts
DAVID Corporation produces two products from a joint process. Information about the
two joint products follows:
Product X Product Y
Anticipated production
2,000 lbs 4,000 lbs
Selling price per pound at split-off
P30
P16
Additional processing cost/pound
after split off (all variable)
15
30
Selling price per pound after
further processing
40
50
The joint cost is P67,000. DAVID currently sells both products at split-off point. If DAVID
processes both products further, its profit will increase by?
Question 202 pts
FAUSTINO Inc. manufactures two products, MICHAEL and GABRIEL. Contribution
margin per unit is determined as follows:
MICHAEL GABRIEL
Revenue
P 130
P 80
Variable costs
(70)
(38)
Contribution margin
60
42
Total demand for MICHAEL is 8,000 units; and for GABRIEL, 16,000 units. Machine
hours is a scarce resource. Only 42,000 machine hours are available during the year.
MICHAEL requires 6 machine hours per unit while GABRIEL requires 3 machine hours
per unit. How many units of MICHAEL should FAUSTINO Inc. produce? 14000