In: Accounting
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
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 |