Question
In: Accounting
Lido Products produces two products (A and B) from a joint process. The joint cost of...
Lido Products produces two products (A and B) from a joint process. The joint cost of production is $80 000. Five thousand units of Product A can be sold at split-off for $20 per unit or processed further at an additional cost of $20 000 and sold for $25 per unit. Ten thousand units of Product B can be sold at split-off for $15 per unit or processed further at an additional cost of $20 000 and sold for $16 per unit. What is the difference in profit if Lido decides to process further Product A, instead of selling it at split-off? Select one: a. $25 000 increase b. $5000 increase c. $27 000 decrease d. $21 000 increase
Solutions
Expert Solution
Solution:
Difference in profit if Lido decides to process further Product A, instead of selling it at split-off = Sale value after further processing - Sale value at split off point - Further processing costs
= (5000*$25) - (5000*$20) - $20,000 = $5,000 Increase
Hence option b is correct.
ekkarill92 answered 2 years agoRelated Solutions
Lido Products produces two products (A and B) from a joint process. The joint cost of...
Lido Products produces two products (A and B) from a joint
process. The joint cost of production is $80 000. Five thousand
units of Product A can be sold at split-off for $20 per unit or
processed further at an additional cost of $20 000 and sold for $25
per unit. Ten thousand units of Product B can be sold at split-off
for $15 per unit or processed further at an additional cost of $20
000 and sold for $16...
TMCC Inc. produces joint products A, B, and C from a joint process. Information concerning a...
TMCC Inc. produces joint products A, B, and C from a joint
process. Information concerning a batch produced in May at a joint
cost of $120,000 was as follows:
A
B
C
Total
Units Sold
2,500
4,000
1,500
8,000
Price (after addt'l processing)
$
35
$
22
$
15
Separable Processing cost
$
35,000
$
12,000
$
16,000
$
63,000
Units Produced
2,500
4,000
1,500
8,000
Total Joint Cost
$
120,000
Sales Price at Split-off
$
25
$
12
$...
Benjamin Company produces two products from a joint process: X and Z. Joint processing costs for...
Benjamin Company produces two products from a joint process: X
and Z. Joint processing costs for this production cycle are
$8,000.
Yards
Sales price
per yard at
split-off
Disposal
cost per yard at
split-off
Further
processing
per yard
Final sale
price per
yard
X 1,500 $6.00 $3.50 $1.00 $7.50
Z 2,200 9.00 5.00 3.00 11.25
If X and Z are processed further, no disposal costs will be
incurred or such costs will be borne by the buyer. Refer to
Benjamin...
Baker Company produces three products: A, B, and C from the same process. Joint costs for...
Baker Company produces three products: A, B, and C from the same
process. Joint costs for this production run are $2,100.
Pounds
Sales price
per lb. at
split-off
Disposal
cost per
lb. at
split-off
Further
processing
per pound
Final
sales price
per pound
A
800
$6.50
$3.00
$2.00
$ 7.50
B
1,100
8.25
4.20
3.00
10.00
C
1,500
8.00
4.00
3.50
10.50
If the products are processed further, Baker Company will incur the
following disposal costs upon sale: A, $3.00;...
The Marshall Company has a joint production process that produces two joint products and a by-product....
The Marshall Company has a joint production process that
produces two joint products and a by-product. The joint products
are Ying and Yang, and the by-product is Bit. Marshall accounts for
the costs of its products using the net realizable value method.
The two joint products are processed beyond the split-off point,
incurring separable processing costs. There is a $1,000 disposal
cost for the by-product. A summary of a recent month’s activity at
Marshall is shown below:
Ying
Yang
Bit...
Center Company currently produces three products from a joint process. The joint process has total costs...
Center Company currently produces three products from a joint
process. The joint process has total costs of $511,000 per month.
All three products, A, B & C, are immediately saleable as they
come out of the joint process. Alternatively, any of the products
could continue on with additional processing and be sold as a more
complete product. The following information is available: Units
Immediate Sales Price Later Sales Price Unit Cost of Further
Processing A 4,500 $ 18 $ 20...
he Marshall Company has a joint production process that produces two joint products and a by-product....
he Marshall Company has a joint production process that produces
two joint products and a by-product. The joint products are Ying
and Yang, and the by-product is Bit. Marshall accounts for the
costs of its products using the net realizable value method. The
two joint products are processed beyond the split-off point,
incurring separable processing costs. There is a $1,300 disposal
cost for the by-product. A summary of a recent month’s activity at
Marshall is shown below: Ying Yang Bit...
Company A produces two products—methanol (wood alcohol) and turpentine -- in a joint process. Joint costs...
Company A produces two products—methanol (wood alcohol) and
turpentine -- in a joint process. Joint costs amount to $124,200
per batch of output. Each batch totals 13,500 gallons: 25% methanol
and 75% turpentine. Both products are processed further without
gain or loss in volume. Separable processing costs are methanol,
$11 per gallon; turpentine, $3 per gallon. Methanol sells for $22
per gallon. Turpentine sells for $16 per gallon. The company has
discovered an additional process by which the methanol (wood...
2 – Portofino Corporation produces three products in a joint process: Product A, Product B and...
2 – Portofino Corporation produces three
products in a joint process: Product A, Product B and Product C.
The total joint manufacturing costs were 100,000$. Information
regarding the products appears below:
Product A
Product B
Product C
Units Produced
20,000
25,000
10,000
Sales Value at Split-off
$150,000
$50,000
$20,000
Additional costs if Processed further
$10,000
$30,000
$5,000
Sales Value if Processed Further
$170,000
$90,000
$28,000
Required:
(a) Allocate the joint costs using the relative sales value at
split-off method.
(b)...
Pam Inc. produces joint products O, P, and Q from a joint process. Information concerning a...
Pam Inc. produces joint products O, P,
and Q from a joint process. Information concerning a batch produced
in May at a joint cost of $90,000 was as follows
After Split - Off
Product
Units
Produced
Additonal
Costs
Market
Values
O
1,400
$22,000
$70,000
P
3,200
16,000
60,000
Q
6,400
4,000
8,000
Required:
(1) Allocate the joint costs to the joint products using the
physical measures method.
(2) Allocate the joint costs to the joint products using...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- “Triangle Guessing” game in Python The program accepts the lengths of three (3) sides of a...
- THIS PROGRAM HAS TO BE WRITTEN IN C Single function to perform the parity computation on...
- Consider a buffer system consisting of Benzoic acid (pKa = 4.20) and sodium benzoate, a) Would...
- Decision Variables S T Minimize 1.8S + 2.20T Subject to: Potassium 5S + 8T >= 200...
- A neurologist needs to counsel a stroke victim and her husband about possible outcomes, treatment options,...
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
ADVERTISEMENT