Ticon Corporation\'s manufacturing operation produces two point products. Produc

Question

Ticon Corporation's manufacturing operation produces two point products. Product delta sells for $24 per unit at the solt-off point. After an additional $225,000 of processing costs are incurred, product omega sells for 581 per unit. In a typical month, 76 000 units are processed; 60,000 units become product delta and 16 000 units become product omega. The joint process has only variable costs. In a typical month, the conversion costs of the joint products amount to $421,000. Materials prices are volatile, and if prices are too high, the company stops production. Required: a. Calculate the maximum price that Ticon should pay for the materials. (Round your answer to 2 decimal places.) Maximum materials price per unit

Explanation / Answer

Maximum Material Price Per Unit :

Conversation Cost(Typical Month) ÷ Number of Units of Products Omega produced(Typical Month)

$421,000 ÷ 16,000 = $ 26.31 per unit

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