Question
In: Accounting
Physical Units Method Alomar Company manufactures four products from a joint production process: barlon, selene, plicene,...
Physical Units Method
Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:
| Direct materials | $63,318 |
| Direct labor | 37,313 |
| Overhead | 25,003 |
At the split-off point, a batch yields 1,104 barlon, 2,809 selene, 2,608 plicene, and 3,511 corsol. All products are sold at the split-off point: barlon sells for $13 per unit, selene sells for $21 per unit, plicene sells for $28 per unit, and corsol sells for $33 per unit.
Required:
1. Allocate the joint costs using the physical units method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar. Note: The total of the allocated cost does not equal to the one provided in the question data due to rounding error.
| Allocated Joint Cost | ||
| Barlon | $ | |
| Selene | ||
| Plicene | ||
| Corsol | ||
| Total | $ |
2. Suppose that the products are weighted as shown below:
| Barlon | 1.2 |
| Selene | 2.0 |
| Plicene | 1.3 |
| Corsol | 2.4 |
Allocate the joint costs using the weighted average method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar.
| Allocated Joint Cost | ||
| Barlon | $ | |
| Selene | ||
| Plicene | ||
| Corsol | ||
| Total | $ |
Solutions
Expert Solution
| Allocation of Joint Cost under Physical unit method | ||||
|
Physical unit (A) |
Allocation rate (B= Total A / A) |
Joint cost (C ) |
Allocated Joint cost (BXC) |
|
| Barlon | 1104 | 11.00% | $465,634.00 | $51,242.02 |
| Selene | 2809 | 28.00% | $465,634.00 | $130,379.38 |
| Plicene | 2608 | 26.00% | $465,634.00 | $121,049.99 |
| Corsol | 3511 | 35.00% | $465,634.00 | $162,962.62 |
| Total | 10032 | $465,634.00 | ||
| Joint Cost= 63318+377313+25003=465634 | ||||
| Allocation of Joint Cost under Weighted method | ||||||
|
Physical unit (A) |
Weighted (B) |
Weighted Physical Unit (C=AXB) |
Allocation rate (D= Total C/ C) |
Joint cost (E ) |
Allocated Joint cost (DXE) | |
| Barlon | 1104 | 1.2 | 1324.8 | 7.06% | $465,634.00 | $32,883.00 |
| Selene | 2809 | 2 | 5618 | 29.95% | $465,634.00 | $139,444.97 |
| Plicene | 2608 | 1.3 | 3390.4 | 18.07% | $465,634.00 | $84,153.47 |
| Corsol | 3511 | 2.4 | 8426.4 | 44.92% | $465,634.00 | $209,152.56 |
| Total | 10032 | 18759.6 | $465,634.00 | |||
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