A company currently produces three products from a joint process. The joint process has total costs of $280,000 per month. All three products, A, B and C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Product 8 C Units 44,000 88,000 132,000 Immediate Sales Price $8 10 6 Later Sales Unit Cost of Further Processing $6.00 Reg A1 Price $ 13 Required: a-1. Should Product A be sold immediately or sold after processing further? a-2. How much will the decision affect profit? 15 9 b-1. Should Product B be sold immediately or sold after processing further? b-2. How much will the decision affect profit? Req B1 c-1. Should Product C be sold immediately or sold after processing further? c-2. How much will the decision affect profit? Complete this question by entering your answers in the tabs below. Reg A2 Req 82 Should Product A be sold immediately or sold after processing further? 2.00 5.00 Reg A1 Req C1 Req C2 Req A2 >

A company currently produces three products from a joint process. The joint process has total costs of $280,000 per month. All three products, A, B and C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Product 8 C Units 44,000 88,000 132,000 Immediate Sales Price $8 10 6 Later Sales Unit Cost of Further Processing $6.00 Reg A1 Price $ 13 Required: a-1. Should Product A be sold immediately or sold after processing further? a-2. How much will the decision affect profit? 15 9 b-1. Should Product B be sold immediately or sold after processing further? b-2. How much will the decision affect profit? Req B1 c-1. Should Product C be sold immediately or sold after processing further? c-2. How much will the decision affect profit? Complete this question by entering your answers in the tabs below. Reg A2 Req 82 Should Product A be sold immediately or sold after processing further? 2.00 5.00 Reg A1 Req C1 Req C2 Req A2 >

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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Assume a company has two divisions, Division C and Division D. Division C has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on the outside market) $ 60 Variable cost per unit $ 44 Fixed costs per unit (based on capacity) $ 8 Capacity in units 20,000 Division D could use Division C’s product as a component part in the manufacture of 4,000 units of its own newly-designed product. Division D has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division C makes. If the company’s divisional managers are evaluated based on their division’s profits and Division C is currently selling 15,000 units on the outside market, what is Division C’s lowest acceptable transfer price if it were to sell 4,000 units to Division D?
Porvide answer in table format Cobe Company has already manufactured 19,000 units of Product A at a cost of $25 per unit. The 19,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $230,000 total additional cost and be converted into 5,500 units of Product B and 11,000 units of Product C. Per unit selling price for Product B is $107 and for Product C is $56. 1. Prepare an analysis that shows whether the 19,000 units of Product A should be processed further or not?
Division A makes a part with the following characteristics: Production capacity in units 31,100 units Selling price to outside customers $ 25 Variable cost per unit $ 19 Total fixed costs $ 107,200 Division B, another division of the same company, would like to purchase 16,500 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $22 each. Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division A refuses to accept the $22 price internally and Division B continues to buy from the outside supplier, the company as a whole will be: Multiple Choice worse off by $49,500 each period. worse off by $99,000 each period. worse off by $25,400 each period. worse off by $65,100 each period.
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 ProcessingCost per Gallon Eventual MarketPrice 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…
Stahl Inc. produces three separate products from a common process costing $100,800. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Sales Valueat Split-OffPoint Cost toProcessFurther Sales Valueafter FurtherProcessing Product 10 $60,400 $100,600 $190,000 Product 12 15,600 30,100 35,400 Product 14 55,500 150,800 214,500 Determine total net income if all products are sold at the split-off point. Net income $ eTextbook and Media Determine total net income if all products are sold after further processing. Net income $ eTextbook and Media Calculate incremental profit/(loss) and determine which products should be…
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Joint products A and B emerge from common processing costs of $100,000 and yield 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 $120 per unit. The amount of joint costs allocated to Product A if joint costs are allocated on the basis of relative sales value will be $ (rounded to nearest dollar
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Cleveland Corporation Manufactures Can product from a process that yields a by-product called FIZZ. The by-product requires additional processing cost of $30,000. The by-product will require selling and administrative expenses totaling $20,000. It is Cleveland's accounting policy to charge the joint costs to the main product only. Information concerning a batch produced during the year ended December 31, 2020 follows: Product Units Produced Market Value at Split Units Sold Off 100,000 8,000 The joint costs incurred up to split-off point are: Can FIZZ $50 $10 60,000 8,000 Direct materials $2,000,000 Direct labor 800,000 Factory overhead 200,000 The selling and administrative expense of Cleveland Corporation for the year ended December 31, 2020 is $1,000,000 exclusive of that for the by-product. Required: 1. What is the gross profit for the year if the net revenue from by-product is presented as other income? 2. What is the gross profit for the year if the net revenue from by=-product is…
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Edge Company produces two models of its product with the same machine. The machine has a capacity of 172 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Required: Contribution margin per unit 1. Determine the contribution margin per machine hour for each model Product Cootribution Margin Standard $ 230 100 $130 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 1 hour 650 units Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin $ 260 156 $ 104 2 hours 250 units Standard Contribution margin per machine hour 2 How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe Total…
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