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In: Accounting

The Alex Corporation produces three outputs: X, Y, ands Z from one input. The sales value...

The Alex Corporation produces three outputs: X, Y, ands Z from one input. The sales value of X at splitoff is $100,000. The sales value of Y at split off is $200,000 and the net realizable value of Z is $20,000. Final sales values are $200,000, $300,000 and $25,000 for X, Y, and Z, respectively. However, these prices are subject to erratic change. Additional processing costs for X, Y, and Z are $50,000, $75,000 and $10,000, respectively. The number of units of each product are 60,000 of X, 60,000 of Y and 30,000 of Z. The total joint costs are $150,000. (You may round your answers to the nearest dollar.) Required: You must upload your answer to canvas for this question in order to receive any credit. Reserve the last 10 minutes provided for this problem to do this. NO EMAIL SOLUTIONS WILL BE ACCEPTED FOR THIS PORTION OF THE EXAM, SO TIME MANAGEMENT IS OF UTMOST IMPORTANCE.. A pdf file is preferred or you may upload a picture of your solution. Show your work on your answer sheet.

At the top of your answer you must include your name and your student number!!

1. Diagram the joint cost process using the values above, as I did in class on our examples. (2 points) Write clearly!!!

2. Allocate joint costs to the three products using (each answer is worth 3 points – Circle your joint cost allocation for each product)

A. Physical Measures Method:

B. Sales Value at Split off Method:

C. Net Realizable Value Method:

D. Constant Gross Margin Method:

3. Which method do you prefer as a manager of the product if you wish to maximize profits? (3 points - show on your solution clearly)

X:

Y:

Z:

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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