Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of product A and 1,600 gallons of product B to the split-off point costs $5,900. The sales value at split-off is $2.00 per gallon for product A and $25.00 per gallon for product B. Product B requires additional separable processing beyond the split-off point at a cost of $2.50 per gallon before it can be sold at a price of $34 per gallon. Required: What is the company's cost to produce 1,600 gallons of product B? Product cost

Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of product A and 1,600 gallons of product B to the split-off point costs $5,900. The sales value at split-off is $2.00 per gallon for product A and $25.00 per gallon for product B. Product B requires additional separable processing beyond the split-off point at a cost of $2.50 per gallon before it can be sold at a price of $34 per gallon. Required: What is the company's cost to produce 1,600 gallons of product B? Product cost

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 4CMA: Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in...

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Problem 11-75 (Algo) Joint Cost Allocation and Product Profitability (LO 11-7, 8, 9) Prescott Lumber processes logs into grade A and grade B lumber. Logs cost $17,200 per load. The milling process produces 5,000 units of grade A with a market value of $100,800, and 20,000 units of grade B with a market value of 514,400. The cost of the milling process is $22,000 per load. Required: a. If the costs of the logs and the milling process are allocated on the basis of units of output what cost will be assigned to each product? b. If the costs of the logs and the milling process are allocated on the basis of the net realizable value, what cost will be assigned to each product? c-1. How much profit or loss does the grade B lumber provide using the data in this problem and your analysis in requirement (a)? c-2. Is it really possible to determine which product is more profitable? Complete this question by entering your answers in the tabs below. ReqA If the costs of the logs and the milling…
Faustina Chemical Company manufactures three chemicals (TX14, NJ35, and KS63) from a joint process. The three chemicals are in industrial grade form at the split-off point. They can either be sold at that point or processed further into the premium grade. Costs related to each batch of this chemical process are as follows: TX14 NJ35 KS63 Sales value at split-off point... $16,000 $12,000 $5,000 Joint costs allocated to product... $6,000 $15,000 $9,000 Sales value after further processing.. Cost of further processing.. $20,000 $18,000 $10,000 $5,000 $4,000 $2,000 For which product(s) above would it be more profitable for Faustina to sell at the split-off point rather than process further? Justify your answer with calculations.
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P12-5 Dallas Company manufactures two joint products: X and Y. Total joint production costs amounted to P100,000. The two products sell for P12 and P6 per unit, respectively. In order to sell this two process at much higher price, Dallas can process them further for additional cost of P25,000. Relevant data are shown below: Units Additional Adjusted Sales Value Produced 10,000 30,000 Products Selling Price Processing Costs P16,200 P12.00 P18.00 Y 6.00 8,800 P25,000 10.00 40,000 Required: Allocate the joint costs to four products using: Quantitative or physical unit method а. b. Sales value at split-off method С. Net realizable value (or adjusted sales value) method
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Faustina Chemical Corporation manufactures three chemicals (TX14, NJ35, and KS63) from a joint process. The three chemicals are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this chemical process is as follows: TX14 NJ35 $ 12,000 $ 6,000 $ 16,000 $ 6,000 $ 20,000 $ 5,000 Sales value after further processing $ 18,000 $3,000 Cost of further processing For which product(s) above would it be more profitable for Faustina to sell at the split-off point rather than process further? Sales value at split-off point Allocated joint costs Multiple Choice O O TX14 only TX14 and KS63 only NJ35 and KS63 only KS63 only KS63 $ 5,000 $ 6,000 $9,000 $ 2,000
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Question iii) Han products manufacturing 40,000 units of part S-9 each year for use of its production line. A this level of activity, the cost per unit for part S-9 is given as follows : DM - $4.60; DL - $12; VMOH $3.60; FMOH $6. An outside supplier has offered to sell 40,000 units of part S-9 each year to Han products for $25 per part. If Han products accepts this offer, the facilities now being used to manufacturing part S-9 could be rented to another company at an annual rental of $80,000. However. Han products has determined that 2/3 of FMOH being applied to part S-9 would continue even if part S-9 were purchased from the outside supplier. Requirement: iii1. Calculate how much profit will increase/decrease if the outside supplier’s offer is accepted.
CH11 #4 How do I figure out which products should be processed further?