Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, from the same process, which last...

Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, from the same process, which last year, cost $480,000. Anderson produced 20,000 pounds of Gorp, which sells for $60 per gallon and 60,000 gallons of Gumm, which sells for $30 per gallon. After the split-off point, Gorp required additional processing costing $300,000 to make it salable. Using the adjusted sales method, how much of the joint cost should be allocated to Gorp?

a. $160,000

b. $120,000

c. $320,000

d. $192,000

Solutions

Expert Solution

All working forms part of the answer
Workings

Working		Gorp	Gumm	TOTAL
A	Gallons	20,000	60,000	80,000
B	Sale price per gallon	$ 60.00	$ 30.00
C = A x B	Total Sales	$ 1,200,000.00	$ 1,800,000.00	$ 3,000,000.00
D = C/3000000	Sale as % of total sales	40%	60%
E = 480000 x D	Cost of $ 480,000 allocated	$ 192,000.00 = ANSWER	$ 288,000.00	$ 480,000.00

Correct Answer = Option ‘D’ $ 192,000

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

chemical process industrial

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.40 ounces $ 18.00 per ounce $ 43.20 Direct labor 0.70 hours $ 14.00 per hour 9.80 Variable manufacturing overhead 0.70 hours $ 3.00 per hour 2.10 Total standard cost per unit $ 55.10...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.50 ounces $ 19.00 per ounce $ 47.50 Direct labor 0.70 hours $ 15.00 per hour 10.50 Variable manufacturing overhead 0.70 hours $ 4.00 per hour 2.80 Total standard cost per unit $ 60.80...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.20 ounces $ 16.00 per ounce $ 35.20 Direct labor 0.80 hours $ 12.00 per hour 9.60 Variable manufacturing overhead 0.80 hours $ 2.50 per hour 2.00 Total standard cost per unit $ 46.80...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.60 ounces $ 20.00 per ounce $ 52.00 Direct labor 0.60 hours $ 16.00 per hour 9.60 Variable manufacturing overhead 0.60 hours $ 4.50 per hour 2.70 Total standard cost per unit $ 64.30...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.30 ounces $ 17.00 per ounce $ 39.10 Direct labor 0.60 hours $ 13.00 per hour 7.80 Variable manufacturing overhead 0.60 hours $ 2.50 per hour 1.50 Total standard cost per unit $ 48.40...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.20 ounces $ 23.00 per ounce $ 50.60 Direct labor 0.60 hours $ 14.00 per hour 8.40 Variable manufacturing overhead 0.60 hours $ 2.50 per hour 1.50 Total standard cost per unit $ 60.50...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.30 ounces $ 17.00 per ounce $ 39.10 Direct labor 0.60 hours $ 13.00 per hour 7.80 Variable manufacturing overhead 0.60 hours $ 2.50 per hour 1.50 Total standard cost per unit $ 48.40...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.40 ounces $ 21.00 per ounce $ 50.40 Direct labor 0.80 hours $ 15.00 per hour 12.00 Variable manufacturing overhead 0.80 hours $ 3.50 per hour 2.80 Total standard cost per unit $ 65.20...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.10 ounces $ 24.00 per ounce $ 50.40 Direct labor 0.40 hours $ 14.00 per hour 5.60 Variable manufacturing overhead 0.40 hours $ 2.50 per hour 1.00 Total standard cost per unit $ 57.00...

Subjects