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 $242,000. Additional information follows: Product FP-10 PP-20 FP-40 Unita Produced 126,000 189,000 105,000 Sales Values $ 183,000 313,000 86,000 Processing Coats (After Split-off) $ 30,000 110,000 26,000 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 105,000 units produced. Required: 3. 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? . 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? 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 105,000 units of FP-40 produced?
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 $242,000. Additional information follows: Product FP-10 PP-20 FP-40 Unita Produced 126,000 189,000 105,000 Sales Values $ 183,000 313,000 86,000 Processing Coats (After Split-off) $ 30,000 110,000 26,000 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 105,000 units produced. Required: 3. 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? . 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? 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 105,000 units of FP-40 produced?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $242,000. Additional information follows:
Product
FP-10
FP-20
FP-40
Units
Produced
126,000
189,000
105,000
Sales Values
$ 183,000
313,000
86,000
Processing
Costs (After
Split-off)
$ 30,000
110,000
26,000
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
105,000 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 105,000 units of FP-40 produced?
Required A
Complete this question by entering your answers in the tabs below.
Required B Required C
Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcebd4779-0d77-4934-b7cd-970817cc004d%2Fc27f3c50-dc51-4d80-8c10-d37b12c137e5%2Fr82h581_processed.jpeg&w=3840&q=75)
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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 $242,000. Additional information follows:
Product
FP-10
FP-20
FP-40
Units
Produced
126,000
189,000
105,000
Sales Values
$ 183,000
313,000
86,000
Processing
Costs (After
Split-off)
$ 30,000
110,000
26,000
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
105,000 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 105,000 units of FP-40 produced?
Required A
Complete this question by entering your answers in the tabs below.
Required B Required C
Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-
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