Question

In: Accounting

Joint products A and B emerge from common processing that costs $240,000 and yields 2,000 units...

Joint products A and B emerge from common processing that costs $240,000 and yields 2,000 units of Product A and 1,000 units of Product B. Product A can be sold for $100 per unit. Product B can be sold for $50 per unit.

Question 5

How much of the joint cost will be assigned to Product B if joint costs are allocated on the basis of relative sales values?

Question 6

What is Product B’s profit if joint costs are allocated on the basis of relative sales values?

Question 7

How much of the joint cost will be assigned to Product B if joint costs are allocated on the basis of the number of units produced?

Question 8

What is Product B’s profit if joint costs are allocated on the basis of the number of units produced?

Solutions

Expert Solution

Answer 5:

Sale value of Product A = 2000 * $100 = $200,000

Sale value of Product B = 1000 * $50 = $50,000

Total sale value = 200000 + 50000 = $250,000

Based on relative sale value joint cost that will be assigned to Product B = 240000 * 50000/250000 = $48,000

Based on relative sale value joint cost that will be assigned to Product B = $48,000

Answer 6:

Sale value of Product B = 1000 * $50 = $50,000

Based on relative sale value joint cost that will be assigned to Product B = $48,000

Product B’s profit = 50000 - 48000 = $2,000

Product B’s profit if joint costs are allocated on the basis of relative sales values = $2,000

Answer 7:

Number of units produced of Product A = 2,000

Number of units produced of Product B = 1,000

Total number of units produced = 2000 + 1000 = 3,000

Based on number of units produced joint cost that will be assigned to Product B = 240000 * 1000/3000

= $80,000

Based on number of units produced joint cost that will be assigned to Product B = $80,000

Answer 8:

Sale value of Product B = 1000 * $50 = $50,000

Based on number of units produced joint cost that will be assigned to Product B = $80,000

Product B’s profit (loss) = 50000 - 80000 = -$30,000 or ($30,000)

Product B’s profit if joint costs are allocated based on number of units produced = -$30,000 or ($30,000)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 20.00 per pound 13,000 pounds B $ 14.00 per...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $335,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 17.00 per pound 12,400 pounds B $ 11.00 per...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $380,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 26.00 per pound 14,200 pounds B $ 20.00 per...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $97,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 4 per pound 14,000 pounds B $ 5 per pound 19,000 pounds C...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $320,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 14.00 per pound 11,800 pounds B $ 8.00 per...

Joes Company manufactures three products from a common input in a joint processing operation. Joint processing...

Joes Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows Product Selling Price Quarterly Output A $ 20.00 per pound 13,000 pounds B $ 14.00 per...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $365,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 23.00 per pound 13,600 pounds B $ 17.00 per...

Gusler company manufactures three products from a common input in a joint processing operation. Joint processing...

Gusler company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 3 per pound 10,000 pounds B $ 6 per pound 22,000 pounds C...

Gutten company makes three products from a common input in a joint processing operation. Joint processing...

Gutten company makes three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 5 per pound 10,000 pounds B $ 7 per pound 22,000 pounds C...

Gusler company manufactures three products from a common input in a joint processing operation. Joint processing...

Gusler company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 4 per pound 10,000 pounds B $ 6 per pound 22,000 pounds C...

Subjects