Question
In: Accounting
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?
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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 2 years agoRelated Solutions
chemical process industrial
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...
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