Question

TMCC Inc. produces joint products A, B, and C from a joint process. Information concerning a batch produced in May at a joint cost of $120,000 was as follows:

	A		B			C			Total
Units Sold		2,500			4,000			1,500			8,000
Price (after addt'l processing)	$	35		$	22		$	15
Separable Processing cost	$	35,000		$	12,000		$	16,000		$	63,000
Units Produced		2,500			4,000			1,500			8,000
Total Joint Cost										$	120,000
Sales Price at Split-off	$	25		$	12		$	13

Required:

(Calculate all ratios, percentages, and unit costs to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar.):

1. Allocate the joint costs to the joint products using the physical measure method.

2. Allocate the joint costs to the joint products using the sales value method.

3. Allocate the joint costs to the joint products using the net realizable method.

Joint Cost Allocated	A	B	C
1. Physical Measure
2. Sales Value
3. NRV

Answer 1

Req a:
Allocation of Joint cost:
Product		Physical Units	Proportion	Joint cost	Allocation
A		2500	31.25%	120000	37500
B		4000	50%	120000	60000
C		1500	18.75%	120000	22500
Total		8000		120000	120000
Req b:
Allocation of Joint cost:
Product	Selling price	Physical Units	Sales value	Proportion	Joint cost	Allocation
A	25	2500	62500	48.08%	120000	57692
B	12	4000	48000	36.92%	120000	44308
C	13	1500	19500	15.00%	120000	18000
Total		8000	130000	100.00%	120000	120000
Req c:
Allocation of Joint cost:
Product	Selling price	Physical Units	Sales value	Further cost	NRV	Proportion	Joint cost	Allocation
A	35	2500	87500	35000	52500	38.89%	120000	46667
B	22	4000	88000	12000	76000	56.30%	120000	67556
C	15	1500	22500	16000	6500	4.81%	120000	5777
Total		8000	198000	63000	135000	100.00%	120000	120000
Joint cost allocated
			A	B	C
Physical measure			37500	60000	22500
sales value			57692	44308	18000
NRV			46667	67556	5777