Assume

1.
i. Computing total profit at each situation
Selling after further processing (LKR)
A

140,000

140,000

120,000

Joint cost

(43,750)

(31,250)

(25,000)

Further processing cost

(50,000)

(40,000)

(70,000)

Profit

46,250

68,750

25,000

Sales value

70,000

60,000

70,000

Joint cost

(43,750)

(31,250)

(25,000)

Profit

26,250

28,750

45,000

Additional profit or loss by further

processing

20,000

40,000

(20,000)

Sales value
Cost

Selling at the point of separation

ii.
Computing additional
profit (LKR)
A

Additional sales
value received

70,000

80,000

50,000

after further processing

(3,500LKR 20)

(2,500LKR 32) (2,000LKR 25)

Further processing cost

(50,000)

(40,000)

(70,000)

20,000

40,000

(20,000)

Additional profit or loss

after further processing

Accordingly, product A and B should be sold after further processing and product C should be
sold at the point of separation.

2.
A

Total LKR

140,000

140,000

70,000

350,000

Joint cost

(43,750)

(31,250)

(25,000)

(100,000)

Further processing cost

(50,000)

(40,000)

(90,000)

Profit

46,250

68,750

25,000

160,000

Sales value
Cost