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Q 3 Abdelaziz Compagny produces 3 types of products.              During the year the joint costs...

Q 3 Abdelaziz Compagny produces 3 types of products.

             During the year the joint costs of processing the 3 products were $350,000.

             Production and sales value information were as follows:

                                             Sales Value

Product        Units produced at Split-Off         Separable Costs        Selling Price

Product A          400,000      $10 per unit          $6.00 per unit         $40 per unit

Product B           300,000        $9 per unit          $4.00 per unit         $28per unit

Product C           500,000        $6 per unit          $3.00 per unit         $18 per unit

a.   Allocate the joint costs using the physical output method.

b.   Allocate the joint costs using the net realizable value method.

c. Allocate the joint costs using sales value at split-off point method.

Solutions

Expert Solution

a. Allocation of joint costs by physical output method
Products Units produced Joint Costs
Product A 400000 116667
Product B 300000 87500
Product C 500000 145833
1200000 350000
b. Allocation of joint costs by net realizale value method.
Final selling Separable Net realisable Net realisable Allocated
Products Units produced Price Costs Price (B-C) Value (A x D) joint costs
(A) (B) (C) (D) (E)
Product A 400000 40 6 34 13600000 168198
Product B 300000 28 4 24 7200000 89046
Product C 500000 18 3 15 7500000 92756
1200000 0 28300000 350000
c. Allocation of joint costs by slae value at split-off
At split off
Products Units produced Sales price Sales Value Joint Costs
Product A 400000 10 4000000 144330
Product B 300000 9 2700000 97423
Product C 500000 6 3000000 108247
1200000 9700000 350000

ekkarill92 answered 1 year ago
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