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CoursHeroTranscribedText: processlng. Corcoran Ltd operate several manufacturing processes. In process G,joint products (P1 and P2) are created in the ratio 5:3 by volume from the raw materials input. In this process, a normal loss of 5 per cent of the raw material input is expected. Losses have a realizable value of 5 per litre. The company holds no work in progress. The joint costs are apportioned to the joint products using the physical measure basis. The following information relates to process G for last month: Raw materials input 60 000 litres (at a cost of 381000) Abnormal gain 1000 litres Other costs incurred: Direct labour 180 000 Direct expenses 54 000 Production 110% of direct labour cost Overheads (a) Prepare the process G account for last month in which both the output volumes and values for each of the joint products are shown separately. ( 7 marks) The company can sell product P1 for 20 per litre at the end of process G. It is considering a proposal to further process P1 in process H in order to create product PP1. Process H has sufficient spare capacity to do this work. The further processing in process H would cost 4 per litre input from process G. In process H, there would be a normal loss in volume of 10 per cent of the input to that process. This loss has no realizable value. Product PP1 could then be sold for 26 per litre. (b) Determine, based on financial considerations only, whether product P1 should be further processed to create product PP1. (3 marks) (c) In the context of process G in Corcoran Ltd, explain the difference between 'direct expenses' and 'production overheads'. (2 marks) (Total 12 marks)

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