TACTICAL DECISION MAKING
7th Meeting Thursday, 9 April 2020
1 Keep or Drop Decision (continuing last meeting)
2. Objective : understand the application of relevant costs ( special order decision )
3. understand Split-off or process further decision
The company produces several products from joint process. The raw material is cow. One of the products is Beef. Company produced 500 kg of Beef. Allocated joint Cost was Rp. 30,000,000. Beef price is Rp. 100,000 per kg.
The company is planning to process further beef to produce Beef Sausages. 1 kg of Beef can produce 100 units of Sausages. Sausages’s price is Rp 2,000 per unit. Cost to process further is Rp 65,000,000
Should we sell at split off point or process further?
4..Objective : understand the application of relevant costs (Sell at Split Off point or Process Further Decision)
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