Week 2 Part 2 Quiz Copy

John Peters is a consultant who is about to leave for a client visit in Nice. A roundtrip ticket Amsterdam – Nice vv costs € 800. Just before leaving, his managers tells him that after his job in Nice he has to continue to Madrid for another client. The combined ticket Amsterdam – Nice – Madrid – Amsterdam costs € 1300. A roundtrip to Madrid from Amsterdam vv would cost € 900. The Madrid visit is seen as an incremental trip because it is a new customer. Using the incremental method with the Nice client as the main user, what are the costs allocated to the Madrid client?

Hamburg Soy (HS) buys soy beans and processes them into soy meal and soy oil. A ton of soy beans is bought for € 300, and after processing with costs of € 250 for the joint process results in 600 kg of soy meal and 300 litres of soy oil. In further processing, specific costs are incurred for the soy meal of € 1.00 per kg, and for soy oil of €0.50 per litre. A kilogram of soy meal sells for € 1.50, and soy oil sells for € 2.00 per litre.

Using the physical measure of weights as a basis for allocating the joint costs, what is the joint cost allocated for the 300 litres of soy oil that is produced from one tone of soy beans?

Using the sales value as a basis for allocating the joint costs, what is the joint cost allocated for the 300 litres of soy oil that is produced from one tone of soy beans?

Using the net realizable value as a basis for allocating the joint costs, what is the joint cost allocated for the 300 litres of soy oil that is produced from one tone of soy beans?

By further processing, HS can upgrade the quality of both soy meal and soy oil. An extra costs of € 2.00 per kg (in addition to the current specific costs per kg of € 1.00) will lead to a market price of € 4.00 per kg of soy meal. An extra cost of € 1.00 per litre (in addition to the current specific costs of € 0.50 per litre) will lead to a market price of € 2.50 per litre of soy oil. What should HS do regarding this upgrading possibilities?