Question
In: Accounting
ohnston Adhesives Company makes three widely used industrial adhesives: A101, A204, and B216. Sales and production...
ohnston Adhesives Company makes three widely used industrial adhesives: A101, A204, and B216. Sales and production information for each of the three adhesives are shown in the following table. Most of Johnston’s customers ask for a special blend of the three products, which improves heat-resistance. The additional separable processing requires additional time and materials, and the price is increased accordingly, as shown in the table. Assume that Johnston produces only for specific customer orders, so there is no beginning or ending inventory. Assume also that all of Johnston’s customers requested the heat-resistant version of the products so that all production required additional separable processing. Total joint cost for the three products is $3,425,000.
| A101 | A204 | B216 | |||||||||
| Gallons sold | 202,000 | 188,000 | 135,000 | ||||||||
| Final sales price per gallon | $ | 14 | $ | 8 | $ | 9 | |||||
| Price at split-off | 11 | 4 | 5 | ||||||||
| Separable processing cost | $ | 607,000 | $ | 115,000 | $ | 550,000 | |||||
Required:
1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods: (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (d) the constant gross margin percentage method. (Round intermediate calculations and cost per unit answers to 4 decimal places. Round your final answers to whole dollar amounts. Negative amounts should be indicated with a minus sign.)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
7-45 Johnson adhesives company makes three widely used industrial adhesives: A101, A 204 and B216 sales...
7-45
Johnson adhesives company makes three widely used industrial
adhesives: A101, A 204 and B216 sales and production information
for each of the three adhesives are shown in the following table.
Most of johnsons customers ask for a special blend of the three
products which improves heat-resistance. The aditional separable
processing requires additional time and materials, and the price is
increased accordingly as shown in the table. Assume that johnson
produces only for specific customer orders, so there is no...
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X2 is shipped to other KNM plants at a given internal price.
The KNM plant in KSA requires 20,000 barrels of X2 per month
and can purchase from outside the firm for $300 per barrel. KNM’s
X2...
KNM Company is specialty manufacturer of a wide variety of industrial chemicals and adhesives. Much of...
KNM Company is specialty manufacturer of a wide variety of
industrial chemicals and adhesives. Much of the raw material is
purchased in bulk from other chemical companies. One of the
chemicals, X2, is prepared in one of KNM’s own plants, the X2 unit.
X2 is shipped to other KNM plants at a given internal price.
The KNM plant in KSA requires 20,000 barrels of X2 per month
and can purchase from outside the firm for $300 per barrel. KNM’s
X2...
KNM Company is specialty manufacturer of a wide variety of industrial chemicals and adhesives. Much of...
KNM Company is specialty manufacturer of a wide variety of
industrial chemicals and adhesives. Much of the raw material is
purchased in bulk from other chemical companies. One of the
chemicals, X2, is prepared in one of KNM’s own plants, the X2 unit.
X2 is shipped to other KNM plants at a given internal
price.
The KNM plant in KSA requires 20,000 barrels of X2 per month and
can purchase from outside the firm for $300 per barrel. KNM’s X2...
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