by Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net- realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories. Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ- 5. Finished goods inventory in gallons (October 1) October sales in gallons October production in gallons Additional processing costs Final sales value per gallon Problem 17-29 Part 1 HTP-3 PST-4 RJ-5 Joint Products HTP-3 26,500 820,000 1,040,000 $1,044,000 5.70 Required: 1. Determine Biondi Industries' allocation of joint production costs for the month of October. (Round the calculation of "Relative Proportion" to the nearest whole percent. Round your final answers to the nearest dollar amount.) Allocation of Joint Cost $ PST-4 63,900 RJ-5 4,700 410,000 235,000 520,000 255,000 $991,000 $82,000 $ 7.70 $ 6.70
by Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net- realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories. Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ- 5. Finished goods inventory in gallons (October 1) October sales in gallons October production in gallons Additional processing costs Final sales value per gallon Problem 17-29 Part 1 HTP-3 PST-4 RJ-5 Joint Products HTP-3 26,500 820,000 1,040,000 $1,044,000 5.70 Required: 1. Determine Biondi Industries' allocation of joint production costs for the month of October. (Round the calculation of "Relative Proportion" to the nearest whole percent. Round your final answers to the nearest dollar amount.) Allocation of Joint Cost $ PST-4 63,900 RJ-5 4,700 410,000 235,000 520,000 255,000 $991,000 $82,000 $ 7.70 $ 6.70
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Overview of Biondi Industries' Joint Production Process**
Biondi Industries is a manufacturer of chemicals for various applications. The products include:
- **HTP-3:** A chemical used in hot tubs and swimming pools.
- **PST-4:** A chemical used in pesticides.
- **RJ-5:** A product for fertilizer manufacturers.
Biondi employs the net-realizable-value method to allocate joint production costs. The ratio of output to input remains consistent monthly, and the company uses FIFO (first-in, first-out) for inventory valuation.
**October Operations Data:**
In October, Biondi incurred joint production costs of $2,550,000 for the products HTP-3, PST-4, and RJ-5. Here is the detailed data:
| Category | HTP-3 | PST-4 | RJ-5 |
|-----------------------------------|--------|--------|-------|
| **Finished goods inventory (Oct 1)** | 26,500 | 63,900 | 4,700 |
| **October sales (gallons)** | 820,000 | 410,000 | 235,000 |
| **October production (gallons)** | 1,040,000 | 520,000 | 255,000 |
| **Additional processing costs** | $1,044,000 | $991,000 | $82,000 |
| **Final sales value per gallon** | $5.70 | $7.70 | $6.70 |
**Problem 17-29 Part 1**
**Requirement:**
1. Determine Biondi Industries’ allocation of joint production costs for October using the method of "Relative Proportion."
- Round percentage calculations to the nearest whole percent.
- Round final answers to the nearest dollar.
**Allocation Table:**
| Joint Products | Allocation of Joint Cost |
|----------------|--------------------------|
| HTP-3 | |
| PST-4 | |
| RJ-5 | |
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