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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 Alpha 28,000 70,000 $ 126,000 1 $ 470,400 201,600 84,000 2 Beta. 82,600 0 $ 743,400 $0 339,780 88,620 3 $0 805,350 307,650 Gamma 98,000 56,000 $ 1,029,000

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 Alpha 28,000 70,000 $ 126,000 1 $ 470,400 201,600 84,000 2 Beta. 82,600 0 $ 743,400 $0 339,780 88,620 3 $0 805,350 307,650 Gamma 98,000 56,000 $ 1,029,000

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 Required A Required B Required C Alpha 28,000 70,000 $ 126,000 Departments Raw material cost Direct labor cost Manufacturing overhead 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 per unit and then sold for $16.30 per unit. Compute the incremental income (loss) from further processing Alpha. c. Considering the results of part b, should Lipton Liquids process Alpha further? 1 $ 470,400 201,600 84,000 Product Alpha Estimated Net Realizable Values 2 Joint Costs Beta 82,600 0 $ 743,400 $0 339, 780 88,620 Complete this question by entering your answers i below. 3 Determine the following amounts for each product: (1) es realizable value used for allocating joint costs, (2) joint c- each of the three products, (3) cost of goods sold, and (4 inventory costs, September 30. Cost of Goods Sold $0 805,350 307,650 Note: Do not round intermediate calculations. Round you the nearest whole dollar amounts. Gamma 98,000 56,000 $ 1,029,000 Ending Inventory
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 Required A Required B Required C Alpha 28,000 70,000 $ 126,000 Departments Raw material cost Direct labor cost Manufacturing overhead 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 per unit and then sold for $16.30 per unit. Compute the incremental income (loss) from further processing Alpha. c. Considering the results of part b, should Lipton Liquids process Alpha further? 1 $ 470,400 201,600 84,000 Product Alpha Estimated Net Realizable Values 2 Joint Costs Beta 82,600 0 $ 743,400 $0 339, 780 88,620 Complete this question by entering your answers i below. 3 Determine the following amounts for each product: (1) es realizable value used for allocating joint costs, (2) joint c- each of the three products, (3) cost of goods sold, and (4 inventory costs, September 30. Cost of Goods Sold $0 805,350 307,650 Note: Do not round intermediate calculations. Round you the nearest whole dollar amounts. Gamma 98,000 56,000 $ 1,029,000 Ending Inventory
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