Question

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 $75,000

Direct labor 35,000

Overhead 25,000

At the split-off point, a batch yields 1,700 barlon, 2,400 selene, 2,300 plicene, and 3,600 corsol. All products are sold at the split-off point: barlon sells for $18 per unit, selene sells for $22 per unit, plicene sells for $25 per unit, and corsol sells for $37 per unit.

Required: Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

Allocated Joint Cost

Barlon ______

Selene _______

Plicene_____

Corsol_______

Total ________ (Note: The total of the allocated cost may not equal actual total costs to due to rounding.)

Answer 1

Solution:
	Total joint cost allocated to the four products
	Direct material + Direct labor + Overhead
	$75,000 + $35,000 + $25,000 = $135,000
	Product	Barlon	Selene	Plicene	Corsol	Total
	Units Produced                      (1)	1,700	$2,400	2,300	3,600
	Selling price per unit             (2)	$18	$22	$25	$37
	Sales value                         (1) * (2)= (3)	$30,600	$52,800	$57,500	$133,200	$274,100
	Rate of allocation             (4) = (3)/$274,100	0.11	0.19	0.21	0.49
	Allocated Joint Cost         (5)= (4) * $135,000	15,071.14	26,005.11	28,319.96	65,603.79
	Allocated Joint Cost
	Barlon	$15,071.14
	Selene	$26,005.11
	Plicene	$28,319.96
	Corsol	$65,603.79
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