Berger Company manufactures products Delta, Kappa, and Omega from a joint process. Production, sales, and cost data for July follow. Delta Kappa Omega Total Units produced .............................................4,000 2,000 1,000 7,000 Joint cost allocation ...................................$36,000 ? ? $60,000 Sales value at split-off .....................................? ? $15,000 $100,000 Additional costs if processed further ....$ 7,000 $ 5,000 $ 3,000 $ 15,000 Sales value if processed furt.......................$70,000 $25,000 $20,000 $115,000 Required: 1. Assuming that joint costs are allocated using the relative-sales-value method, what were the joint costs allocated to products Kappa and Omega? 2. Assuming that joint costs are allocated using the relative-sales-value method, what was the sales value at split-off for product Delta? 3. Use the net-realizable-value method to allocate the joint production costs to the three products
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Berger Company manufactures products Delta, Kappa, and Omega from a joint process. Production, sales, and cost data for July follow.
Delta Kappa Omega Total
Units produced .............................................4,000 2,000 1,000 7,000
Joint cost allocation ...................................$36,000 ? ? $60,000
Sales value at split-off .....................................? ? $15,000 $100,000
Additional costs if processed further ....$ 7,000 $ 5,000 $ 3,000 $ 15,000
Sales value if processed furt.......................$70,000 $25,000 $20,000 $115,000
Required:
1. Assuming that joint costs are allocated using the relative-sales-value method, what were the joint costs allocated to products Kappa and Omega?
2. Assuming that joint costs are allocated using the relative-sales-value method, what was the sales value at split-off for product Delta?
3. Use the net-realizable-value method to allocate the joint production costs to the three products.
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