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Question Three Z manufactures three joint products (M. N and P) from the same common process. The following process account relates to the common process last month and is typical of the monthly results of operating this process: RM Opening work in process Materials Conversion costs: Variable Fixed Common Process Account Lites RM 1,000 5,320 Normal loss 100,000 250,000 Output M Output N 100.000 Output P 180.000 Closing work in process Abnormal loss 101.000 535.320 Litas 10,000 25,000 15,000 45,000 800 5.200 101.000 20.000 141.875 85,125 255,375 3,533 29.412 525.320 Each one of the products can be sold immediately after the common process, but each one of them can be further processed individually before being sold. The following further processing costs and selling prices per tite are expected Product Solling price after Selling price affer Further variable common process further processing processing cost RMATOR RMSSON M 6.25 8-40 1.75 N 5-20 6-45 0 95 7.45 0-85 RM/80R 6-80 Required: (a) state the method used to apportion the common costs between the products M, N and P and comment on its acceptability. Explain why it is necessary to apportion the common costs between each of the products. (5 marks) (b) Evaluate the viability of the common process, and determine the optimal processing plan for each of the three products showing appropriate calculations (5 marks) (Total for Section A = 45 marks)

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