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Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, September 30. Note: Round your percentages to 2 decimal places (i.e. .1234 = 12.34%). Do not round other intermediate calculations. Round your final answers to the nearest whole dollar amounts. Product Alpha Beta Gamma Total Estimated Net Realizable Values $ 0 $ Joint Costs Cost of Goods Sold 0 $ < Required A 0 $ Ending Inventory Required B > Show less A

Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, September 30. Note: Round your percentages to 2 decimal places (i.e. .1234 = 12.34%). Do not round other intermediate calculations. Round your final answers to the nearest whole dollar amounts. Product Alpha Beta Gamma Total Estimated Net Realizable Values $ 0 $ Joint Costs Cost of Goods Sold 0 $ < Required A 0 $ Ending Inventory Required B > Show less A

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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Lipton Liquids produces three products by a joint production process. Raw materials are put into production in Department 1, and at the end of processing in this department, three products appear. Alpha is sold at the split-off point with no further processing. Beta and Gamma require further processing before they are sold. Beta is processed in Department 2, and Gamma is processed in Department 3. Lipton Liquids uses the estimated net realizable value method of allocating joint production costs. No inventories were on hand at July 1, the beginning of the quarter. No raw material was on hand at September 30. All units on hand at September 30 were fully complete as to processing. Following is a summary of costs and other data for the period ended September 30: Products Units sold Units on hand at September 30 Sales revenues Departments Raw material cost Direct labor cost Manufacturing overhead Required A Required B Product Alpha Beta Gamma Total Required A Required: a. Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, September 30. b. Assume that the entire output of Alpha could be processed further at an additional cost of $12.00 per unit and then sold for $16.30 per unit. Compute the incremental income from further processing Alpha. c. Considering the results of part b, should Lipton Liquids process Alpha further? Complete this question by entering your answers in the tabs below. Estimated Net Realizable Values Incremental loss $ Required B 1 $ 524,160 224,640 93,600 Required C Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, September 30. Note: Round your percentages to 2 decimal places (i.e. .1234 = 12.34%). Do not round other intermediate calculations. Round your final answers to the nearest whole dollar amounts. Alpha 31,200 78,000 $ 140,400 0 $ Joint Costs Required C 2 $0 378,612 98,748 0 $ Beta 92,040 0 $ 828,360 Cost of Goods Sold < Required A 3 $0 897,390 342,810 < Required A 0 Gamma 109, 200 62,400 $ 1,146,600 $ Ending Inventory 0 Required B > Assume that the entire output of Alpha could be processed further at an additional cost of $12 per unit and then sold for $16.30 per unit. Compute the incremental income (loss) from further processing Alpha. Show less A Required C >
Transcribed Image Text:Lipton Liquids produces three products by a joint production process. Raw materials are put into production in Department 1, and at the end of processing in this department, three products appear. Alpha is sold at the split-off point with no further processing. Beta and Gamma require further processing before they are sold. Beta is processed in Department 2, and Gamma is processed in Department 3. Lipton Liquids uses the estimated net realizable value method of allocating joint production costs. No inventories were on hand at July 1, the beginning of the quarter. No raw material was on hand at September 30. All units on hand at September 30 were fully complete as to processing. Following is a summary of costs and other data for the period ended September 30: Products Units sold Units on hand at September 30 Sales revenues Departments Raw material cost Direct labor cost Manufacturing overhead Required A Required B Product Alpha Beta Gamma Total Required A Required: a. Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, September 30. b. Assume that the entire output of Alpha could be processed further at an additional cost of $12.00 per unit and then sold for $16.30 per unit. Compute the incremental income from further processing Alpha. c. Considering the results of part b, should Lipton Liquids process Alpha further? Complete this question by entering your answers in the tabs below. Estimated Net Realizable Values Incremental loss $ Required B 1 $ 524,160 224,640 93,600 Required C Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, September 30. Note: Round your percentages to 2 decimal places (i.e. .1234 = 12.34%). Do not round other intermediate calculations. Round your final answers to the nearest whole dollar amounts. Alpha 31,200 78,000 $ 140,400 0 $ Joint Costs Required C 2 $0 378,612 98,748 0 $ Beta 92,040 0 $ 828,360 Cost of Goods Sold < Required A 3 $0 897,390 342,810 < Required A 0 Gamma 109, 200 62,400 $ 1,146,600 $ Ending Inventory 0 Required B > Assume that the entire output of Alpha could be processed further at an additional cost of $12 per unit and then sold for $16.30 per unit. Compute the incremental income (loss) from further processing Alpha. Show less A Required C >
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