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Sales-Value-at-Split-off Method Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and...

Sales-Value-at-Split-off 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 $67,900

Direct labor 34,00

Overhead 25,500

At the split-off point, a batch yields 1,400 barlon, 2,600 selene, 2,500 plicene, and 3,500 corsol. All products are sold at the split-off point: barlon sells for $15 per unit, selene sells for $20 per unit, plicene sells for $26 per unit, and corsol sells for $35 per unit. Carry out all percent calculations to four significant digits.

Production is weighted as below.

BARLON 1.0

SELENE 2.0

PLICENE 1.5

CORSOL 2.5

allocate the joint costs using the weighted average method and allocate the joint costs using the sales-value-at-split-off method.

Solutions

Expert Solution

Requirement: Allocate the joint costs using the weighted average method and allocate the joint costs using the sales-value-at-split-off method.

Solution:-

Total Joint Cost:
Material $67,900
Labor $34,000
Overhead $25,500
Total Joint Cost $127,400

Note: In question, Might be labor charges are $34,000 instead of $34,00

Allocate the joint costs using the sales-value-at-split-off method.

Product Units Sale price at split Sales Value % Sales Joint Cost Allocated Join Cost
Barlon 1,400 $15 $21,000 8.06% $127,400 $10,268.44
Selene 2,600 $20 $52,000 19.96% $127,400 $25,429.04
Plicene 2,500 $26 $65,000 24.95% $127,400 $31,786.30
Corsol 3,500 $35 $122,500 47.03% $127,400 $59,916.22
$260,500 100% $127,400 $127,400.00

Working Note:-

Calculation of percentage of Sales:

Barlon = 21,000 / 260,500 = 8.06%

Selene = 52,000 / 260,500 = 19.96%

Plicene = 65,000 / 260,500 = 24.95%

Corsol = 122,500 / 260,500 = 47.03%

Caclulation of Allocated Joint Cost:

Barlon = $127,400 * 8.06% = $10,268.44

Selene = $127,400 * 19.96% = $25,429.04

Plicene = $127,400 * 24.95% = $31,786.30

Corsol = $127,400 * 47.03% = $59,916.22

Allocate the joint costs using the weighted average method

Product (a) Weight (b) Joint Cost (c) Allocated Joint Cost b/7 * c
Barlon 1.0 127,400 $18,200
Selene 2.0 127,400 $36,400
Plicene 1.5 127,400 $27,300
Corsol 2.5 127,400 $45,500
7 $127,400

Working Note:-

Barlon = 1 / 7 * 127,400 = $18,200

Selene = 2 / 7 * 127,400 = $36,400

Plicene = 1.5 / 7 * 127,400 = $27,300

Corsol = 2.5 / 7 * 127,400 = $45,500

Thank You..

I hope I was able to help you.

ekkarill92 answered 2 years ago
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