Question

In: Accounting

1.) The AB Company produces 4,000 units of product A and 6,000 units of product B...

1.) The AB Company produces 4,000 units of product A and 6,000 units of product B in a joint production process. If a weight factor of 2 is assigned to each unit of product A and a weight factor of 3 is assigned to each unit of product B, the weighted number of units would be:

A. product A 2,000 units and B 2,000 units.

B. product A 8,000 units and product B 18,000 units.

C. product A 1,600 units and B 3,600 units.

D. none of the above.

2.) AB Corporation manufactures two products, A and B, through a joint manufacturing process. The sales price for Product A is $15 and for product B is $7.   Last month, 8,000 units of product A and 10,000 units of product B were manufactured. The total joint cost in was $82,000. The separable cost, after split-off point, was $20,000 for product A and $6,000 for product B.

AB Corporation allocate joint costs using the relative-market-value method. The shares of joints costs would be:

A. For Product A: $100,000, for Product B: $54,000

B. For Product A: $36,445, for Product B: $45,555

C. For Product A: $51,790, for Product B: $30,210

D. For Product A: $50,000, for Product B: $32,000

3.) AB Corporation manufactures two products, A and B, through a joint manufacturing process. The sales price for Product A is $15 and for product B is $7.   Last month, 8,000 units of product A and 10,000 units of product B were manufactured. The total joint cost in was $82,000. The separable cost, after split-off point, was $20,000 for product A and $6,000 for product B.

AB Corporation allocate joint costs using the physical-measure method. The shares of joints costs would be:

A. For Product A: $100,000, for Product B: $54,000

B. For Product A: $36,444, for Product B: $45,556

C. For Product A: $51,790, for Product B: $30,210

D. For Product A: $50,000, for Product B: $32,000

Solutions

Expert Solution

Requirement A
Answer: B. product A 8,000 units and product B 18,000 units.
Explanation:
Product A (4,000 x 2)       8,000 Units
Product B (6,000 x 3)     18,000 Units
Requirement 2
Answer:C.For Product A: $51,790, for Product B: $30,210
Explanation:
Allocation joint costs using the relative-market-value method
Market value Allocated Joint Costs
Product A (8,000x$15) 1,20,000 (82,000/190,000*120,000)     51,790
Product B (10,000x$7)     70,000 (82,000/190,000*70,000)     30,210
Total 1,90,000     82,000
Requirement 3.
Answer: B. For Product A: $36,444, for Product B: $45,556
Allocation joint costs using the physical-measure method
Physical units Allocated Joint Costs
Product A 8,000 (82,000/18,000*8,000)     36,444
Product B 10,000 (82,000/18,000*10,000)     45,556
Total 18,000     82,000

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