Alnahdi Pharmaceutical Company has a joint production process that converts Kappa into two chemicals Gamma...

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Alnahdi Pharmaceutical Company has a joint production process that converts Kappa into two chemicals Gamma and Delta. The company purchases Kappa for $24 per pound and incurs a cost of $60 per pound to process it into Gamma and Delta. For every 10 pounds of Kappa, the company can produce 8 pounds of Gamma and 2 pounds of Delta. The selling price for Gamma and Delta are $153 and $288 respectively. Alnahdi Pharmaceutical Company processes Gamma and Delta further in separable processes to produce more refine products. Gamma is processed separately into Gammalite at a cost of $50.10 per pound. Delta is processed separately into Deltalite at a cost of $225.60 per pound. Gammalite and Deltalite sell for $210 and $570 per pound respectively. Alnahdi Pharmaceutical purchase 15000 pounds of Kappa. There is no beginning or ending inventory of Kappa. Required: 1. Allocate the joint costs to Gammalite and Deltalite using the net realizable value method. 2. Alnahdi Pharmaceutical is considering an opportunity to process Deltalite further into a new product Super Delta. The separate processing will cost $170 per pound and expects an additional $30 per pound packaging cost for Super Delta. The expected selling price would be $720 per pound. Should Alnahdi sell Deltalite or Super Delta? What selling price for Super Delta would make Alnahdi indifferent between selling Deltalite and Super Delta

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