Ester Limited produces two products X and Y by producing a common raw material in acommon production process. The production for the month of April was 8000 units of X and6000 units of Y. Whereas sales were 7000 units and 4000 units of X and Y respectively.Following are the other details.Selling price per unit at split off point is $25 and $20 of X and Y respectivelySelling price per unit after further processing is $60 for X and $80 for YOther expenses are as follows:Further processing expense of X and Y is $29 and $38 respectivelyTotal Joint cost for the month is $80,000Allocate Joint cost on the basis of:(a) Market Value Split off method(b) Net realizable value method

Cost allocation is a process of assigning or allocating indirect cost to each and every unit It can…

Ester Limited produces two products X and Y by producing a common raw material in a common production process. The production for the month of April was 8000 units of X and 6000 units of Y. Whereas sales were 7000 units and 4000 units of X and Y respectively. Following are the other details. Selling price per unit at split off point is $25 and S20 of X and Y respectively Selling price per unit after further processing is S60 for X and $80 for Y Other expenses are as follows: Further processing expense of X and Y is $29 and $38 respectively Total Joint cost for the month is $80,000 Allocate Joint cost on the basis of: (a) Market Value Split off method (b) Net realizable value method

Ester Limited produces two products X and Y by producing a common raw material in a common production process. The production for the month of April was 8000 units of X and 6000 units of Y. Whereas sales were 7000 units and 4000 units of X and Y respectively. Following are the other details. Selling price per unit at split off point is $25 and S20 of X and Y respectively Selling price per unit after further processing is S60 for X and $80 for Y Other expenses are as follows: Further processing expense of X and Y is $29 and $38 respectively Total Joint cost for the month is $80,000 Allocate Joint cost on the basis of: (a) Market Value Split off method (b) Net realizable value method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Empire Chemical Company produces three products using three different continuous processes. The…

A: Hi studentSince there are multiple subparts asked, we will answer only first three…

Q: Benoit Company produces three productsA, B, and C. Data concerning the three products follow (per…

A: Lets understand the basics.Contribution margin is a margin generated on sale of each and every unit.…

Q: A company manufactures three products using the same production process. The costs incurred up to…

A: Step 1:Incremental Income (loss) is the difference between incremental revenue and incremental…

Q: The joint process from which Ple'egrea, Inc. obtains both Nuts and Bolts has a total cost of $74,000…

A: Allocation of Joint Cost: To calculate the cost per unit of output using this approach, just divide…

Q: Juett Company produces a single product. The cost of producing and selling a single unit of this…

A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…

Q: Northwest Building Products (NBP) manufactures two lumber products from a joint milling process:…

A: The objective of the question is to allocate the joint costs to the two products (RBL and CBL) using…

Q: Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and…

A: The cost is assigned to the production on the basis of the net realizable value or physical quantity…

Q: Babuca Corporation has provided the following production and total cost data for two levels of…

A: Variable manufacturing cost :— It is the total variable cost incurred in the manufacturing of…

Q: Presley produces three products from a joint process. The joint process has total costs of $500,000…

A: Whenever in a common process more than one product is manufactured at a single process cost then…

Q: Alvarez Company makes three joint products, products A, B, and C. For each batch, the materials cost…

A: Joint costing system is used when more than one product is being manufactured by same manufacturing…

Q: Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and…

A: Joint cost is the total cost incurred for the manufacturing of two or more joint products during…

Q: Healthy Eats produces three products from a single raw material. The total cost is $160,000 and the…

A: Given that, Product A = 10,000 units Selling price at split-off point = $4 per unit Further…

Q: A Florida processing company, Sunshine ToGo, produces two products from a joint process: Alpha and…

A: Using physical measure method, Joint processing cost = 9,000 Total units produced = 1,800 + 2,600…

Q: A Florida processing company, Sunshine ToGo, produces two products from a joint process: Alpha and…

A: Lets understand the basics. In sales value at spllit off method, joint processing cost allocated to…

Q: Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a…

A: GIVEN If Processed Further Product Units Produced Unit Sales Value at Split-off…

Q: Beverage Drink Company processes direct materials up to the splitoff point where two products, A and…

A: To calculate the expected sales values of production for Product Z5 and Product W3, we need to…

Q: Harmon Inc. produces joint products L, M, and N from a joint process. Information concerning a batch…

A: Joint cost is the total cost incurred in the manufacturing of two or more joint products during the…

Q: Denger

A: Joint Cost Allocation for Lawn ProductsWe can find the joint costs allocated to each product (X and…

Q: RelyaTech Corporation makes two products, Light and Heavy. These two products emerge from a joint…

A: Formula:Sales Revenue = Total sale units x Selling price per unit.

Q: Salem Company has the following costs information for June where production volume is 2,000 units:…

A: Hi studentSince there are multiple questions, we will answer only first question.Variable costs are…

Question

Ester Limited produces two products X and Y by producing a common raw material in a
common production process. The production for the month of April was 8000 units of X and
6000 units of Y. Whereas sales were 7000 units and 4000 units of X and Y respectively.
Following are the other details.
Selling price per unit at split off point is $25 and $20 of X and Y respectively
Selling price per unit after further processing is $60 for X and $80 for Y
Other expenses are as follows:
Further processing expense of X and Y is $29 and $38 respectively
Total Joint cost for the month is $80,000
Allocate Joint cost on the basis of:
(a) Market Value Split off method
(b) Net realizable value method

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Calcion Industries produces two joint products, Y and Z. Prior to the split-off point, the company incurred costs of $31,000. Product Y weighs 15 pounds and product Z weighs 85 pounds. Product Y sells for $150 per pound and product Z sells for $125 per pound. Based on a physical measure of output, allocate joint costs to products Y and Z. Product Y allocation $______ Product Z allocation $______
Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $42,000 per batch. The joint process produces 11,250 units of Chem-A with a market value of $135,000, and 20,000 units of Chem-B with a market value of $33,750. The conversion cost of the joint process is $13,400 per batch. Elsa Products allocates joint costs using the physical quantities method. The company never holds any inventory. Required: What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs? 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? 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?
Schoen Corp. manufactures three types of electrical motors. Type A is sold upon completion of the production assembly. Types B and C can be sold after production or sent to a different plant for further processing to add various capabilities to the motors. The following data are available for each of the three types of motors at the beginning of the month: Units to be produced Total costs to produce before further processing Total sales revenue if sold immediately Additional processing costs Total sales revenue if processed further Additional profit (or loss) if B is processed further: $ A 10,000 $240,000 300,000 0 0 B 8,000 $250,000 320,000 30,000 340,000 6,000 $240,000 300,000 20,000 360,000
Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 23,000 pounds of Alpha at a total cost of $99,000. The output of the process consisted of 28,800 units of product X, 35,200 units of product Y, and 7,100 units of by-product Z. By-product Z can be sold for $12,000. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y? Product X Product Y Joint Costs
Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 26,000 pounds of Alpha at a total cost of $102,000. The output of the process consisted of 30,150 units of product X, 36,850 units of product Y, and 7,400 units of by-product Z. By-product Z can be sold for $10,800. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y?
Chem Manufacturing Company processes direct materials up to the splitoff point where two products (X and Y) are obtained and sold. The following information was collected for the month of November: Production: X 3000 gallons, Y 2000 gallons . Sales: X 2600 at $15 per gallon ,Y 1700 at $10 per gallon. The joint cost was $20000. No beginning inventories of X and Y. --- Using the physical-volume method, joint cost allocated for X : Select one: O a. $20000 O b. $8000 c. $12000 O d. $10000
Cola Drink Company processes direct materials up to the splitoff point where two products, A and B, are obtained. The following information was collected for the month of July: Direct materials processed: 2,500 liters (with 20% shrinkage) Production: A 1,500 liters B 500 liters $15.00 per liter $10.00 per liter Sales: A В The cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff point to yield a total of 2,000 liters of good products was $4,500. There were no inventory balances of A and B. Product A may be processed further to yield 1,375 liters of Product Z5 for an additional processing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginning inventory and ending inventory was 125 liters. Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginning inventory and ending inventory was 25 liters. 5. When using sales…
Redhead Equipment Inc. manufactures three products. Information about the selling prices and unit costs for the three products is below: Product A Selling price $90.00 $60.00 $110.00 Variable costs $52.00 $24.00 $63.00 Fixed costs $22.00 $8.00 $25.00 Compression machine time 11 min. 6 min. 13 min. Fixed costs are applied based on direct labour hours. Demand for the three products exceeds the company's current production capacity. The compression machine is the constraint, with just 2,500 minutes of compression machine time available this week. Required: a. Given the compression machine constraint, which product should be emphasized? Be sure to show your calculations to support your recommendation Activa Go to P