Don't give answer in image format By-product and cost allocationGeorgia Co. raises peaches that, at harvest, are separated into three grades: premium, good, and fair. Joint cost is allocated toproducts based on bushels of output. The $540,000 joint cost for one harvest yielded the following output quantities.Product Output in BushelsPremium26,40069,6969,504GoodFairThe joint process also created a by-product that had a total net realizable value of $104,000. The company records the by-product inventory as a reduction to Work in Process Inventory-Joint Products. Allocate the joint cost to the joint productsusing bushels of output.Premium SGoodFairTotal$

Joint cost is the cost incurred in a production process where two or more products are produced…

Georgia Co. raises peaches that, at harvest, are separated into three grades: premium, good, and fair. Joint cost is allocated to products based on bushels of output. The $540,000 joint cost for one harvest yielded the following output quantities. Product Output in Bushels Premium 26,400 69,696 Good Fair The joint process also created a by-product that had a total net realizable value of $104,000. The company records the by- product inventory as a reduction to Work in Process Inventory-Joint Products. Allocate the joint cost to the joint products using bushels of output. Premium $ Good Fair Total 9,504 5

Georgia Co. raises peaches that, at harvest, are separated into three grades: premium, good, and fair. Joint cost is allocated to products based on bushels of output. The $540,000 joint cost for one harvest yielded the following output quantities. Product Output in Bushels Premium 26,400 69,696 Good Fair The joint process also created a by-product that had a total net realizable value of $104,000. The company records the by- product inventory as a reduction to Work in Process Inventory-Joint Products. Allocate the joint cost to the joint products using bushels of output. Premium $ Good Fair Total 9,504 5

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 11E

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A Chemical Company manufactures joint products Pep and Vim, and a by product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow: Pep Vim Zest Unit Produced 5000 4000 1000 Sales price per unit 50 40 5 Further processing cost per unit 10 5 0 Selling and adm. Expense per unit 0 0 2 operating profit per unit 0 0 1 Required: The gross profit for pep is The value of Zest to deducted from the joint cost is
Joint cost allocation McKenzies Soap Sensations, Inc., produces hand soaps with three different scents: morning glory, snowflake sparkle, and sea breeze. The soap is produced through a joint production process thatcosts 30,000 per batch. Each batch produces 14,800 bottles of morning glory hand soap, 12,000bottles of snowflake sparkle hand soap, and 10,000 bottles of sea breeze hand soap at the split-offpoint. Each product is processed further after the split-off point, but the market value of a bottle ofany of the flavors at this point is estimated to be 1.25 per bottle. The additional processing costsof morning glory, snowflake sparkle, and sea breeze hand soap are 10.50, 0.55, and 0.60 perbottle, respectively. Morning glory, snowflake sparkle, and sea breeze hand soap are then sold for2.00, 2.20, and 2.40 per bottle, respectively. Instructions 1. Using the net realizable value method, allocate the joint costs of production to each product. 2. Explain why McKenzies Soap Sensations, Inc., always chooses to process each varietyof hand soap beyond the split-off point. 3. If demand for all products was the same, which product should McKenzies Soap Sensations, Inc., produce in the highest quantity?
Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?
A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs 12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows: Required: 1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. (Round the percentages to four significant digits. Round all cost allocations to the nearest dollar.) 2. What if it cost 2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products?
Breegle Company produces three products (B-40, J-60, and H-102) from a single process. Breegle uses the physical volume method to allocate joint costs of 22,500 per batch to theproducts. Based on the following information, which product(s) should Breegle continue toprocess after the split-off point in order to maximize profit? a. B-40 only b. J-60 only c. H-102 only d. B-40 and H-102 only
Joint cost allocation Lovely Lotion Inc. produces three different lotions: hand, body, and foot. The lotions are produced jointly in a mixing process that costs a total of 250 per batch. At the split-off point, one batchproduces 80, 40, and 25 bottles of hand, body, and foot lotion, respectively. After the split-off point,hand lotion is sold immediately for 2.50 per bottle. Body lotion is processed further at an additional cost of 0.25 per bottle and then sold for 5.75 per bottle. Foot lotion is processed further atan additional cost of 0.85 per bottle and then sold for 4.00 per bottle. Assume that body and footlotion could be sold at the split-off point for 3.00 and 3.20 per bottle, respectively. Instructions 1. Using the market value at split-off method, allocate the joint costs of production to each product. 2. Based on the information provided and your answer to part (1), should Lovely LotionInc. continue processing body and foot lotion after the split-off point? 3. Allocate the joint costs of production to each product using the net realizable value method.
Strawberry Sweet Company makes a variety of jams and jellies. During June, 55,000 gallons of strawberry mash was processed at a joint cost of $40,000. This produced 42,000 gallons of preserve-grade mix and 4,000 gallons of Strawberry juice for jelly. The juice could be processed further into energy drinks, and the preserve mix could be processed further into ice cream flavoring. Information on these items is shown: A. Assume that the joint cost is allocated to the products based on the physical quantity of output of each product. How much joint cost should be assigned to each product? B. How much joint cost should be assigned to each product if the relative sales value allocation method is used? C. Which products should be processed further?
A Chemical Company manufactures joint products Pep and Vim, and a by-product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow: Pep Vim Zest Units Produced 5,000 4,000 1,000 Sales price per unit 50.00 40.00 5.00 Further processing cost per unit 10.00 5.00 0.00 Selling & Adm. Expense per unit 0.00 0.00 2.00 Operating Profit per unit 0.00 0.00 1.00 The gross profit for Pep is
A Chemical Company manufactures joint products Pep and Vim, and a by-product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow: Pep Vim Zest Units Produced 5,000 4,000 1,000 Sales price per unit 50.00 40.00 5.00 Further processing cost per unit 10.00 5.00 0.00 Selling & Adm. Expense per unit 0.00 0.00 2.00 Operating Profit per unit 0.00 0.00 1.00 The value of Zest to be deducted from the joint cost is
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Joint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch. Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places.
Joint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch. Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places. Joint Product Allocation Washed $ Stained Pressure treated Totals $