Question

Sales-Value-at-Split-off Method

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

Direct materials	$73,500
Direct labor	39,000
Overhead	26,000

At the split-off point, a batch yields 1,900 barlon, 2,200 selene, 2,100 plicene, and 4,000 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $22 per unit, plicene sells for $28 per unit, and corsol sells for $35 per unit.

Required:

Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

	Allocated Joint Cost
Barlon	$
Selene
Plicene
Corsol
Total	$

(Note: The total of the allocated cost may not equal actual total costs to due to rounding.)

Answer 1

Allocated Joint Cost
Barlon	(138,500 / 279,500) * 32,300 = 16,006
Selene	(138,500 / 279,500) * 48,400 = 23,984
Plicene	(138,500 / 279,500) * 58,800 = 29,137
Corsol	(138,500 / 279,500) * 140,000 = 69,374
Total	(138,500 / 279,500) * 279,500 = 138,500
Total cost = $(73,500+39,000+26,000) = $138,500
Sales value:-
	Yields	Price per unit	Sales value
Barlon	1,900	17	32,300
Selene	2,200	22	48,400
Plicene	2,100	28	58,800
Corsol	4,000	35	140,000
Total sales value			279,500
Allocated Joint Cost = (Total cost / Total sales value) * Sales value of product