Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this process isas follows:Sales Price at split-off pointAllocated joint costsSales Price after further processingCost of further processingProduct QuantityProduct 1$16$6,000$20$5,3301,000 lb.Product 2$12$6,000$18$2,0501,000 lb.Product 3$5$6,000$14$2,5301,000 lb.Q: What would be the additional amount of profit thatmore profitable to process further rather than be sold at the split-off point?A: $Corp, would gain from further processing the product(s) that is/are

Profit refers to the financial profit or the bookkeeping profit which states the net income or the…

Corporation manufactures three products from a joint process. The three products are in industrial grade form at the s point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this proces: follows: ales Price at split-off point located joint costs ales Price after further processing most of further processing oduct Quantity Product 1 $16 $6,000 $20 $5,330 1,000 lb. Product 2 $12 $6,000 $18 $2,050 1,000 lb. Product 3 $5 $6,000 $14 $2,530 1,000 lb. What would be the additional amount of profit that hore profitable to process further rather than be sold at the split-off point? $ Corp, would gain from further processing the product(s) that is/an

Corporation manufactures three products from a joint process. The three products are in industrial grade form at the s point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this proces: follows: ales Price at split-off point located joint costs ales Price after further processing most of further processing oduct Quantity Product 1 $16 $6,000 $20 $5,330 1,000 lb. Product 2 $12 $6,000 $18 $2,050 1,000 lb. Product 3 $5 $6,000 $14 $2,530 1,000 lb. What would be the additional amount of profit that hore profitable to process further rather than be sold at the split-off point? $ Corp, would gain from further processing the product(s) that is/an

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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Stoney Brook Company produces two products (X and Y) from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Joint manufacturing costs for the year were $81,000. Sales values and costs were as follows: Product Units Made Sales Price at Split-Off If Processed Further Sales Value Separable Cost X 12,000 $ 43,000 $ 81,000 $ 10,500 Y 4,000 86,000 96,000 7,500 If the joint production costs are allocated based on the relative-sales-value method, what woukd be the amount of joint cost assigned to product X ?
Split Company produces three products — X, Y, and Z — from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond split-off. Joint production costs for the year were $142,000. Sales values and costs needed to evaluate Split's production policy follow. Product Units Produced Sales Value at Split Off If Processed Further Sales Value Additional Costs x 16,000 $ 45,500 $ 107,500 $ 6,700 y 4,000 31,500 56,500 14,000 z 5,000 38,000 52,000 18,000 The amount of joint costs allocated to product X using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $45,500 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $27,300 $ 18,200 $ 45,500 Sales value at split-off point $ 30,000 $20,000 $50,000 Costs of further processing $ 24,200 $ 18,500 $ 42,700 Sales value after further processing $ 47,800 $58,300 $ 106,100 Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d.…
Marin Products produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Marin's production, sales, and costs follows. DBB-1 DBB-2 DBB-3 Total Units Sold 16,000 25,000 36,000 77,000 Price (after addt’l processing) $ 30 $ 15 $ 40 Separable Processing cost $ 179,000 $ 72,000 $ 107,000 $ 358,000 Units Produced 16,000 25,000 36,000 77,000 Total Joint Cost $ 3,600,000 Sales Price at Split-off $ 20 $ 30 $ 50 The amount of joint costs allocated to product DBB-2 using the sales value at split-off method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the…
Milo Manufacturing produces products Kappa and Lambda from a joint process. Total joint costs are $168,000. The sales value at split-off was $174,960 for 8,400 units of Kappa and $63,280 for 12,600 units of Lambda. Required: What joint costs are allocated to the two products using the net realizable value at split-off approach? Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts. What joint costs are allocated to the two products using the physical quantities method? Note: Do not round intermediate calculations. Kappa Lambda a. Net realizable value method ??? ??? b. Physical quantities method ??? ???
Split Company produces three products-X, Y, and Z-from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond split-off. Joint production costs for the year were $130,000. Sales values and costs needed to evaluate Split's production policy follow. Product X y Z A. $27,132. B. $32,143. C. $37,143. D. $43,788. E. $60,714. OA B C Units Produced 14,000 7,500 3,500 OD Sales Value at Split Off $42,500 22,500 26,000 If Processed Further Sales Value $ 92,500 47,500 40,000 The amount of joint costs allocated to product Y using the sales value at split-off method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): Additional Costs $ 3,700 8,000 9,000
Division X of Bella Corporation sells Part A to other companies for $87.20 per unit. According to the company's accounting system, the costs to Division X to make a unit of Part A are: O $87.20 per unit O $62.60 per unit O $58.10 per unit O $79.95 per unit O None of the above Direct materials Direct labor $5.80 Variable Division Y of Bella Corporation uses a part much like Part A in one of its products. Division Y can buy this part from an outside supplier for $79.95 per unit. However, Division Y could use Part A instead of the part it purchases from the outside supplier. What is the most Division Y would be willing to pay the Division X for Part A? Question 21 $42.70 manufacturing $9.60 overhead Fixed manufacturing $4.50 overhead
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4. Sell at Split-Off or Process Further Decision, Alternatives, Relevant Costs Betram Chemicals Company processes a number of chemical compounds used in producing industrial cleaning products. One compound is decomposed into two chemicals: anderine and dofinol. The cost of processing one batch of compound is $76,500, and the result is 5,900 gallons of anderine and 7,900 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $9.00 per gallon and the dofinol for $6.00 per gallon. Alternatively, the anderine can be processed further at a cost of $8.10 per gallon (of anderine) into cermine. It takes 3 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $60. Required: 1. Which alternative is more cost effective and by how much?NOTE: Do NOT round interim calculations and, if required, round your answer to the nearest dollar. by $fill in the blank 2 2. What if the production of anderine into cermine required additional purchasing and quality…
Marin Products produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Marin's production, sales, and costs follows. DBB-1 DBB-2 DBB-3 Total Units Sold 11,000 17,000 24,000 52,000 Price (after addt’l processing) $ 10 $ 25 $ 30 Separable Processing cost $ 282,000 $ 114,000 $ 169,000 $ 565,000 Units Produced 17,600 31,000 39,400 88,000 Total Joint Cost $ 4,800,000 Sales Price at Split-off $ 20 $ 30 $ 50 The amount of joint costs allocated to product DBB-3 using the physical measure method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest…
ats Assume a company has three products-A, B, and C-that emerge from a joint process. The joint processing costs that are incurred up to the split-off point equal $1,200,000. The selling prices and outputs for each product at the split-off point are as follows: Product A B С Selling Price $33 per pound $29 per pound $24 per pound Product A B C Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows: Output 14,000 pounds 18,000 pounds 19,000 pounds Additional Processing Costs $65,000 $72,000 $88,000 Selling Price $37 per pound $34 per pound $30 per pound The company is trying to decide whether to retain or discontinue the entire joint manufacturing process. What is the financial advantage (disadvantage) of continuing to operate the entire joint manufacturing process?