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Exercise 11-52 (Algo) Physical Quantities Method; Sell or Process Further (LO 11-3, 4) Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $241,700. Additional Information follows: Sales Values Product FP-10 FP-20 FP-40 Units Produced 117,000 175,500 97,500 $ 180,750 312,250 85,700 Processing Costs (After Split-Off) $ 29,700 109,700 25,700 The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 97,500 units produced. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, In case the disposal cost for FP-40 Increases to $150,000 for every 97,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? Indifference point FP-10 FP-20 < Required A Required C >

Exercise 11-52 (Algo) Physical Quantities Method; Sell or Process Further (LO 11-3, 4) Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $241,700. Additional Information follows: Sales Values Product FP-10 FP-20 FP-40 Units Produced 117,000 175,500 97,500 $ 180,750 312,250 85,700 Processing Costs (After Split-Off) $ 29,700 109,700 25,700 The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 97,500 units produced. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, In case the disposal cost for FP-40 Increases to $150,000 for every 97,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? Indifference point FP-10 FP-20 < Required A Required C >

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 13E: Computing joint costssales value at split-off and net realizable value methods D.L. Manufacturing...
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Exercise 11-52 (Algo) Physical Quantities Method; Sell or Process Further (LO 11-3, 4) Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $241,700. Additional Information follows: Sales Values Product FP-10 FP-20 FP-40 Units Produced 117,000 175,500 97,500 $ 180,750 312,250 85,700 Processing Costs (After Split-Off) $ 29,700 109,700 25,700 The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 97,500 units produced. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, In case the disposal cost for FP-40 Increases to $150,000 for every 97,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? Indifference point FP-10 FP-20 < Required A Required C >
Transcribed Image Text:Exercise 11-52 (Algo) Physical Quantities Method; Sell or Process Further (LO 11-3, 4) Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $241,700. Additional Information follows: Sales Values Product FP-10 FP-20 FP-40 Units Produced 117,000 175,500 97,500 $ 180,750 312,250 85,700 Processing Costs (After Split-Off) $ 29,700 109,700 25,700 The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 97,500 units produced. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, In case the disposal cost for FP-40 Increases to $150,000 for every 97,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? Indifference point FP-10 FP-20 < Required A Required C >
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