Example with Byproduct and Separable Costs: Lond Co. produces joint products Jana and Reta, together with byproduct Bynd. Jana is sold at split-off, whereas Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 20x1 were as follows: Jana Reta Bynd Total Joint costs Variable $88,000 Fixed 148,000 Separable costs Variable $120,00 $3,000 123,000 Fixed 90,000 2,000 92,000 Production in Pounds 50,000 40,000 10,000 100,000 Sales price per pound $4.00 $7.50 $1.10 There were no beginning or ending inventories. No materials are spoiled in production. Variable costs change in direct proportion to production volume. The net realizable value of the byproduct (Bynd) is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product. Required: Allocate joint costs using: 1. Unit of measure method. 2. Net realizable value method. 3. Constant gross margin percent method.

Example with Byproduct and Separable Costs: Lond Co. produces joint products Jana and Reta, together with byproduct Bynd. Jana is sold at split-off, whereas Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 20x1 were as follows: Jana Reta Bynd Total Joint costs Variable $88,000 Fixed 148,000 Separable costs Variable $120,00 $3,000 123,000 Fixed 90,000 2,000 92,000 Production in Pounds 50,000 40,000 10,000 100,000 Sales price per pound $4.00 $7.50 $1.10 There were no beginning or ending inventories. No materials are spoiled in production. Variable costs change in direct proportion to production volume. The net realizable value of the byproduct (Bynd) is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product. Required: Allocate joint costs using: 1. Unit of measure method. 2. Net realizable value method. 3. Constant gross margin percent method.

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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Company produced joint products M, N and O from same raw materials with total joint costs P35,000. Other data are as follows: Quantity Produced in units (1,500; 2,500; 1,000); Unit Market value at split-off (P6; P10; P8); Final unit selling price (P10, P12, P15); Additional costs after split off (P3,000; P2,000; P5,000); Quantity Sold (1,200; 2,000; 800). Using the average unit cost method, what is the unit cost of Product M? P 7.80 P12.00 P 9.00 P 7.00
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Company produced joint products M, N and O from same raw materials with total joint costs P35,000. Other data are as follows: Quantity Produced in units (1,500; 2,500; 1,000); Unit Market value at split-off (P6; P10; P8); Final unit selling price (P10, P12, P15); Additional costs after split off (P3,000; P2,000; P5,000); Quantity Sold (1,200; 2,000; 800). Using the market value at split-off method, what is the unit cost of Product O? P11.67 P 9.13 P 7.00 P 7.80
After allocating the joint process costs to its two joint products, Allomar Co. reports gross margin percentages of 30% for Product A and 40% for Product B. Sales reported for each product were $25,000 for Product A and $60,000 for Product B. Neither of the two products were processed beyond the split-off point. Calculate the total amount of joint costs assigned between the two products. Allocated joint costs Product A Product B Assuming Allomar used the physical quantities method to allocate the joint costs, what percentage of the total production volume did Product B represent? (Round answer to 2 decimal places, e.g. 15.25%.) Proportion of joint costs assigned to product B %
Product Cost Period (Selling Name of the Cost Variable Cost Fixed Cost Direct Materials Direct Labor Manu-facturing Overhead and Admin) Cost Oppor-tunity Cost Sunk Cost Rental revenue forgone, $30,000 per year X Direct materials cost, $80 per unit X X Rental cost of warehouse, $500 per month X X Rental cost of equipment, $4,000 per month X X Direct labor cost, $60 per unit X X Depreciation of the annex space, $8,000 per year X X X Advertising cost, $50,000 per year X X Supervisor's salary, $1,500 per month X X Electricity for machines, $1.20 per unit X X Shipping cost, $9 per unit X X Return earned on investments, $3,000 per year…
Denver Fabricators manufactures products DF1 and DF2 from a joint process, which also yields a by-product, BP. The company accounts for the revenues from its by-product sales as other income. Additional information follows: DF1 DF2 BP Total Units produced 27,000 18,000 15,000 60,000 Allocated joint costs ? ? ? $ 560,000 Sales value at split-off $ 561,000 $ 187,000 $ 102,000 $ 850,000 Required: Assuming that joint product costs are allocated using the net realizable value at split-off approach, what joint costs are allocated to each of the joint products DF1 and DF2 and to the by-product, BP?
This is another cost accounting problem
COST ACCOUNTING PLS SHOW SOLUTION
17 oints Split Corporation manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows: Units produced Allocated joint costs Sales value at split-off 01:39:59 Sales value if processed further Additional costs for further processing Product X's sales value at the split-off point is: 26,000 $ 161,280 Z Total 22,000 $ 108,000 18,000 $180,000 66,000 $449,280 ? 150,000 66,000 250,000 624,000 46,000 186,000 341,000 279,000 1,268,000 74,000 648,000 0 Multiple Choice $156,000. $19,000. $190,000 $224,000 $117,000.
5
Sunland Inc. produces three separate products from a common process costing $100,100. Each of the products can be sold at the split- off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Product 10 Product 12 Product 14 (c) Product Your answer is partially correct. Product 10 Product 12 Product 14 $ Sales Value at Split-Off Point $59,700 $ 15,800 $ 55,400 Calculate incremental profit/(loss) and determine which products should be sold at the split-off point and which should be processed further. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Incremental profit (loss) Cost to Process Further eTextbook and Media $100,100 30,800 149,700 Sales Value after Further Processing $191,000 34,700 Decision 214,000 Should be processed further Should be sold at the split-off point Should be processed further Assistance Used