1. Landmark Coal operates a mine. During July, the company obtained 500 tons of
ID: 2634861 • Letter: 1
Question
1. Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,700 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.85 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper?
2.
Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows:Explanation / Answer
Soln :
250 pounds + 63,700 pounds = 63,950
250/63,950X 500,000 = $ 1954.65 cost for extraction of gold
63,700 / 63,950 X 500,000 = $ 498,045.34 cost for extraction of copper
Revenue from copper = 63,700 X 0.85 = $ 54,145
Profit from copper = $ 54,145 - $ 498,045.34 = - $ 443,900.34 ( Loss)
b) The profit before the exhibit = Revenue - costs
Revenue = $201,000 - $ 193,200 = $ 7,800
The profit after the exhibit
Revenue = 237,000
Profit =$ 237,000 - $ 193,200 = $ 43,800
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