(Solution) - Myers Quarry produces coarse gravel and sand in an 8 2 -(2025 Original AI-Free Solution)

Paper Details

Myers Quarry produces coarse gravel and sand in an 8:2 ratio. Joint costs for a month (volume = 9,000 tons of rocks input) amount to $225,000. Values at the split-off point are $30 per ton for gravel and $40 per ton for sand.

Required:
a. Allocate joint costs to the two products using the relative sales value at split off as the allocation basis.
b. Suppose Myers can run the sand through a sieve to remove small rocks and make fine sand used to fill sandboxes. The process will, however, reduce the yield of sand from 1,800 tons to 900 tons. This superior grade of sand (?sandbox? quality) retails for $160 per ton. However, Myers will incur $18,000 to process the sand into ?sandbox? quality. Should Myers sell the coarse sand as is or process it further into sandbox quality sand?