ces Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $41,200 per batch. The joint process produces 5,000 units of Chem-A with a market value of $174,200, and 15,000 units of Chem-B with a market value of $39,350. The conversion cost of the joint process is $16,000 per batch. Elsa Products allocates joint costs using the physical quantities method. The company never holds any Inventory. Required: a. What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs? b. If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not unit) and profit will be reported for each product? c. How much will profit at Elsa Products Increase or decrease if the company switches to the net realizable value method for allocating Joint process costs? Complete this question by entering your answers in the tabs below. Required A Required B Required C What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs? Note: Do not round intermediate calculations. Amounts to be deducted should be indicated by a minus sign. Realizable value Allocation of joint cost Reported profit Chem-A Chem-B < Required A Required B >
ces Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $41,200 per batch. The joint process produces 5,000 units of Chem-A with a market value of $174,200, and 15,000 units of Chem-B with a market value of $39,350. The conversion cost of the joint process is $16,000 per batch. Elsa Products allocates joint costs using the physical quantities method. The company never holds any Inventory. Required: a. What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs? b. If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not unit) and profit will be reported for each product? c. How much will profit at Elsa Products Increase or decrease if the company switches to the net realizable value method for allocating Joint process costs? Complete this question by entering your answers in the tabs below. Required A Required B Required C What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs? Note: Do not round intermediate calculations. Amounts to be deducted should be indicated by a minus sign. Realizable value Allocation of joint cost Reported profit Chem-A Chem-B < Required A Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ces
Elsa Products processes Chem-Z Into two products: Chem-A and Chem-B. Chem-Z costs $41,200 per batch. The joint process
produces 5,000 units of Chem-A with a market value of $174,200, and 15,000 units of Chem-B with a market value of $39,350. The
conversion cost of the joint process is $16,000 per batch. Elsa Products allocates Joint costs using the physical quantities method. The
company never holds any Inventory.
Required:
a. What cost (total, not unit) and profit will be reported for each product using the current method for allocating Joint costs?
b. If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not unit) and
profit will be reported for each product?
c. How much will profit at Elsa Products Increase or decrease if the company switches to the net realizable value method for allocating
Joint process costs?
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs?
Note: Do not round intermediate calculations. Amounts to be deducted should be indicated by a minus sign.
Realizable value
Allocation of joint cost
Reported profit
Chem-A
Chem-B
Required A
Required B >
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not
unit) and profit will be reported for each product?
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollars.
Realizable value
Allocation of joint cost
Reported profit
Chem-A
Chem-B
< Required A
The profit at Elsa products will increase.
The profit at Elsa products will decrease.
The profit at Elsa products will not change.
Complete this question by entering your answers in the tabs below.
Required C >
Required A Required B Required C
How much will profit at Elsa Products increase or decrease if the company switches to the net realizable value method for
allocating joint process costs?
<Required B
Required >
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