Johnston Adhesives Company makes three widely used industrial adhesives: A101, A204, and B216. Sales and production information for each of the three adhesives are shown in the following table. Most of Johnston’s customers ask for a special blend of the three products, which improves heat-resistance. The additional separable processing requires additional time and materials, and the price is increased accordingly, as shown in the table. Assume that Johnston produces only for specific customer orders, so there is no beginning or ending inventory. Assume also that all of Johnston’s customers requested the heat-resistant version of the products so that all production required additional separable processing. Total joint cost for the three products is $3,411,000. A101 A204 B216 Gallons sold 240,000 240,000 178,000 Final sales price per gallon $ 13 $ 6 $ 11 Price at split-off 10 3 7 Separable processing cost $ 563,000 $ 81,000 $ 623,000 Calculate the unit product cost and total gross margin for each of the three product lines using
Johnston Adhesives Company makes three widely used industrial adhesives: A101, A204, and B216. Sales and production information for each of the three adhesives are shown in the following table. Most of Johnston’s customers ask for a special blend of the three products, which improves heat-resistance. The additional separable processing requires additional time and materials, and the price is increased accordingly, as shown in the table. Assume that Johnston produces only for specific customer orders, so there is no beginning or ending inventory. Assume also that all of Johnston’s customers requested the heat-resistant version of the products so that all production required additional separable processing. Total joint cost for the three products is $3,411,000.
| A101 | A204 | B216 | |
|---|---|---|---|
| Gallons sold | 240,000 | 240,000 | 178,000 |
| Final sales price per gallon | $ 13 | $ 6 | $ 11 |
| Price at split-off | 10 | 3 | 7 |
| Separable processing cost | $ 563,000 | $ 81,000 | $ 623,000 |
Calculate the unit product cost and total gross margin for each of the three product lines using
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
The last part of my original question was cut off. I needed the cost per unit and total gross margin using the constant gross margin method.
by Bartleby Expert
