A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,700. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows: Product Gallons Further Processing Cost per Gallon Eventual Market Price per Gallon L-Ten 3,400 $0.40 $2.10 Triol 3,900 1.10 5.30 Pioze 2,400 1.60 6.60 Required: 1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation L-Ten $fill in the blank 1 Triol fill in the blank 2 Pioze fill in the blank 3 Total $fill in the blank 4 2. What if it cost $2.10 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation L-Ten $fill in the blank 5 Triol fill in the blank 6 Pioze fill in the blank 7 Total $fill in the blank 8

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,700. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

Product	Gallons	Further Processing Cost per Gallon	Eventual Market Price per Gallon
L-Ten	3,400	$0.40	$2.10
Triol	3,900	1.10	5.30
Pioze	2,400	1.60	6.60

Required:

1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.

	Joint Cost
Grades	Allocation
L-Ten	$fill in the blank 1
Triol	fill in the blank 2
Pioze	fill in the blank 3
Total	$fill in the blank 4

2. What if it cost $2.10 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.

	Joint Cost
Grades	Allocation
L-Ten	$fill in the blank 5
Triol	fill in the blank 6
Pioze	fill in the blank 7
Total	$fill in the blank 8

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