Question

In: Accounting

Fisher Chemicals processes a liquid into three outputs: Sigma, Tau, and Upsilon. Sigma accounts for 58...

Fisher Chemicals processes a liquid into three outputs: Sigma, Tau, and Upsilon. Sigma accounts for 58 percent of the net realizable value at the split-off point, Tau accounts for 28 percent, and Upsilon accounts for the balance. The joint costs total $641,000. If Upsilon is accounted for as a by-product, its $75,000 net realizable value at split-off is credited to the joint manufacturing costs using method 1 described in the text, which credits the by-product’s net realizable value as a reduction in the joint costs.

A. What are the allocated joint costs for the three outputs, if Upsilon is accounted for as a joint product?

Accounted for as a Joint Product
Sigma
Tau
Upsilon

B. What are the allocated joint costs for the three outputs, if Upsilon is accounted for as a by-product? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)

Allocated for as a By-Product
Sigma
Tau
Upsilon

Solutions

Expert Solution

Answer A:

Accounted for as a joint product
Sigma $                        371,780
Tau $                        179,480
Upsilon $                          89,740

Calculation:

Accounted for as a joint product
Sigma =641000*58%
Tau =641000*28%
Upsilon =641000*14%

Answer B:

Accounted for as a by- product
Sigma $                        381,721
Tau $                        184,279
Upsilon $                                   -  

Calculation:

Accounted for as a by- product
Sigma =(641000-75000)*58/86
Tau =(641000-75000)*28/86
Upsilon =(641000-75000)*0/86

In case of any doubt, please comment.

ekkarill92 answered 2 years ago
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