As a start-up company, Blue Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Laura is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Laura is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. $53,750 $406,000 $20,000 87.5% Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. The intern must have used the Net Realizable Value Method method. eTextbook and Media (b) Attempts: 1 of 3 used Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) (1) The joint process $ (2) Further processing of product Y $
As a start-up company, Blue Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Laura is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Laura is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. $53,750 $406,000 $20,000 87.5% Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. The intern must have used the Net Realizable Value Method method. eTextbook and Media (b) Attempts: 1 of 3 used Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) (1) The joint process $ (2) Further processing of product Y $
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 25P: Auflegger, Inc., manufactures a product that experiences the following activities (and times):...
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