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Case 17-36 Comprehensive Case on Joint Cost Allocation (LO 17-4, 17-5) Valdosta Chemical Company manufactures two industrial chemical products in a joint process. In May, 20,000 gallons of input costing $62,000 were processed at a cost of $158,000. The joint process resulted in 15,000 pounds of Resoline and 5,000 pounds of Krypto. Resoline sells for $20 per pound, and Krypto sells for $40 per pound. Management generally processes each of these chemicals further in separable processes to produce more refined chemical products. Resoline is processed separately at a cost of $6 per pound. The resulting product, Resolite, sells for $34 per pound. Krypto is processed separately at a cost of $10 per pound. The resulting product, Kryptite, sells for $95 per pound. Required: 2-a. Allocate the company's joint production costs for May using the physical-units method. 2-b. Allocate the company's joint production costs for May using the relative-sales-value method. 2-c. Allocate the company's joint production costs for May using the net-realizable-value method. 3-a. Valdosta's management is considering an opportunity to process Kryptite further into a new product called Omega. The separable processing will cost $39 per pound. Packaging costs for Omega are projected to be $7 per pound, and the anticipated sales price is $132 per pound. Calculate the incremental profit or loss from processing Kryptite into Omega. 3-b. Should Kryptite be processed further into Omega? Complete this question by entering your answers in the tabs below. Req 2A Joint Products Req 2B Resoline Krypto Total Req 2C Allocate the company's joint production costs for May using the physical-units method. (Round the calculation of "Relative Proporation" to the nearest percent.) Allocation of Joint Cost $ Req 3A 0 Req 3B

Case 17-36 Comprehensive Case on Joint Cost Allocation (LO 17-4, 17-5) Valdosta Chemical Company manufactures two industrial chemical products in a joint process. In May, 20,000 gallons of input costing $62,000 were processed at a cost of $158,000. The joint process resulted in 15,000 pounds of Resoline and 5,000 pounds of Krypto. Resoline sells for $20 per pound, and Krypto sells for $40 per pound. Management generally processes each of these chemicals further in separable processes to produce more refined chemical products. Resoline is processed separately at a cost of $6 per pound. The resulting product, Resolite, sells for $34 per pound. Krypto is processed separately at a cost of $10 per pound. The resulting product, Kryptite, sells for $95 per pound. Required: 2-a. Allocate the company's joint production costs for May using the physical-units method. 2-b. Allocate the company's joint production costs for May using the relative-sales-value method. 2-c. Allocate the company's joint production costs for May using the net-realizable-value method. 3-a. Valdosta's management is considering an opportunity to process Kryptite further into a new product called Omega. The separable processing will cost $39 per pound. Packaging costs for Omega are projected to be $7 per pound, and the anticipated sales price is $132 per pound. Calculate the incremental profit or loss from processing Kryptite into Omega. 3-b. Should Kryptite be processed further into Omega? Complete this question by entering your answers in the tabs below. Req 2A Joint Products Req 2B Resoline Krypto Total Req 2C Allocate the company's joint production costs for May using the physical-units method. (Round the calculation of "Relative Proporation" to the nearest percent.) Allocation of Joint Cost $ Req 3A 0 Req 3B

FINANCIAL ACCOUNTING
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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**Case 17-36 Comprehensive Case on Joint Cost Allocation (LO 17-4, 17-5)** Valdosta Chemical Company manufactures two industrial chemical products in a joint process. In May, 20,000 gallons of input costing $62,000 were processed at a cost of $158,000. The joint process resulted in 15,000 pounds of Resoline and 5,000 pounds of Krypto. Resoline sells for $20 per pound, and Krypto sells for $40 per pound. Management generally processes each of these chemicals further in separable processes to produce more refined chemical products. Resoline is processed separately at a cost of $6 per pound. The resulting product, Resolite, sells for $34 per pound. Krypto is processed separately at a cost of $10 per pound. The resulting product, Kryp­tite, sells for $95 per pound. **Required:** 2-a. Allocate the company’s joint production costs for May using the physical-units method. 2-b. Allocate the company’s joint production costs for May using the relative-sales-value method. 2-c. Allocate the company’s joint production costs for May using the net-realizable-value method. 3-a. Valdosta’s management is considering an opportunity to process Krypto further into a new product called Omega. The separable processing will cost $39 per pound. Packaging costs for Omega are projected to be $7 per pound, and the anticipated sales price is $132 per pound. Calculate the incremental profit or loss from processing Krypto into Omega. 3-b. Should Kryp­tite be processed further into Omega? --- **Instructions for Input:** Complete this question by entering your answers in the tabs below: - Req 2A - Req 2B - Req 2C - Req 3A - Req 3B **Table: Allocate the company’s joint production costs for May using the physical-units method.** *(Round the calculation of "Relative Proportion" to the nearest percent.)* | Joint Products | Allocation of Joint Cost | |----------------|--------------------------| | Resoline | | | Krypto | | | **Total** | $0 |
Transcribed Image Text:**Case 17-36 Comprehensive Case on Joint Cost Allocation (LO 17-4, 17-5)** Valdosta Chemical Company manufactures two industrial chemical products in a joint process. In May, 20,000 gallons of input costing $62,000 were processed at a cost of $158,000. The joint process resulted in 15,000 pounds of Resoline and 5,000 pounds of Krypto. Resoline sells for $20 per pound, and Krypto sells for $40 per pound. Management generally processes each of these chemicals further in separable processes to produce more refined chemical products. Resoline is processed separately at a cost of $6 per pound. The resulting product, Resolite, sells for $34 per pound. Krypto is processed separately at a cost of $10 per pound. The resulting product, Kryp­tite, sells for $95 per pound. **Required:** 2-a. Allocate the company’s joint production costs for May using the physical-units method. 2-b. Allocate the company’s joint production costs for May using the relative-sales-value method. 2-c. Allocate the company’s joint production costs for May using the net-realizable-value method. 3-a. Valdosta’s management is considering an opportunity to process Krypto further into a new product called Omega. The separable processing will cost $39 per pound. Packaging costs for Omega are projected to be $7 per pound, and the anticipated sales price is $132 per pound. Calculate the incremental profit or loss from processing Krypto into Omega. 3-b. Should Kryp­tite be processed further into Omega? --- **Instructions for Input:** Complete this question by entering your answers in the tabs below: - Req 2A - Req 2B - Req 2C - Req 3A - Req 3B **Table: Allocate the company’s joint production costs for May using the physical-units method.** *(Round the calculation of "Relative Proportion" to the nearest percent.)* | Joint Products | Allocation of Joint Cost | |----------------|--------------------------| | Resoline | | | Krypto | | | **Total** | $0 |
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