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Carl corp. manufactures three products and allocates joint costs at its relative sales value of split-off...

  1. Carl corp. manufactures three products and allocates joint costs at its relative sales value of split-off point. The following joint product cost were incurred for the current period.

Raw materials $180,000

Direct labor $120,000

Factory Overhead $200,000

The following production data were provided by Carl corp. for current period:

Product Name                   Unit Produced SP at SOP Separable Cost Final SP

Milk 10,000 $ 20.00 $ 50,000 $ 24

Flour 20,000 $ 15.00 $ 60,000 $ 18

Butter 30,000 $ 12.50 $ 1000,000 $16

What is the gross profit/unit of Product Isa for the current period?

What is the total gross profit (Loss) for the current period if Carl corp. will correctly process further the proper items?

Solutions

Expert Solution

I think there is mistake in furthering processing cost of butter, it may be 100,000 instead of 1000000.So I calcutaed on both the values.

Gross profit per unit at split off point:

Gross profit per unit after further processing:

Gross profit per unit after further processing taking 100,000 for Butter:

Total gross Profit/Loss after further processing = -$533,000

If 100,000 as Butter further cost:

Total gross Profit/Loss after further processing = $370,000

ekkarill92 answered 1 year ago
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