Question

1. Instant Foods produces two types of microwavable products—beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which Instant dumps at negligible costs in a local drainage area. In June 2018, the following data were reported for the production and sales of beef-flavored and shrimp-flavored ramen:

	Joint costs
Joint Costs (costs of noodles, spices, and other inputs and processing to splitoff point)	$240,000
	Beef Ramen	Shrimp Ramen
Beginning inventory (tons)	0	0
Production (tons)	10,000	20,000
Sales (tons)	10,000	20,000
Selling price per ton	$10	$15

Due to the popularity of its microwavable products, Instant decides to add a new line of products that targets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Special S, respectively. The following is the monthly data for all the products:

	Joint costs			Special B		Special S
Joint Costs (costs of noodles, spices, and other inputs and processing to splitoff point)	$240,000
Separable costs of processing 10,000 tons of Beef Ramen into 12,000 tons of Special B				48,000
Separable cost of processing 20,000 tons of Shrimp Ramen into 24,000 tons of Special S						168,000
Transfer for further processing (tons)	Beef Ramen	Shrimp Ramen		Special B		Special S
Beginning inventory (tons)	0	0		0		0
Production (tons)	10,000	20,000		12,000		24,000
	10,000	20,000
Sales (tons)				12,000		24,000
Selling price per ton	$10		$15		$18		$25

1. Allocate the joint costs of $240,000 between Beef Ramen and Shrimp Ramen under

(a) the sales value at split-off method (1 pt)

(b) the physical-measure method. (1pt)

2. Allocate the joint costs of $240,000 between Special B and Special S under the NRV method. (1pt)

solve in microsoft word

Answer 1

	For Instant Foods
1] a]	By Sales Value Split off Point Method
		Beef Ramen	Shrimp Ramen	Total
	No. of Units	10,000.00	20,000.00
x	Sale Price per unit ($)	10.00	15.00
	Total Sales Revenue	100,000.00	300,000.00	400,000.00
	Weighting	0.25	0.75	1.00
	JOINT COST ALLOCATED	60,000.00	180,000.00	240,000.00
b]	By Physical Measure Method
		Beef Ramen	Shrimp Ramen	Total
	No. of Units	10,000.00	20,000.00	30,000.00
	Weighting	1	2	3
	JOINT COST ALLOCATED	80,000.00	160,000.00	240,000.00
c	By Net Realizable Value Method
		Special B	Specila S	Total
	No. of Units	12,000.00	24,000.00
x	Sale Price per unit ($)	18.00	25.00
	Total Sales Revenue	216,000.00	600,000.00	816,000.00
Less:	Separable Cost	(48,000.00)	(168,000.00)	(216,000.00)
	Sales Value of Total Cost of Production At Split off	168,000.00	432,000.00	600,000.00
	Weighting	0.28	0.72	1.00
	JOINT COST ALLOCATED	67,200.00	172,800.00	240,000.00

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