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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 $3,209,000. Gallons sold A101 201,000 A204 187,000 B216 Final sales price per gallon Price at split-off $ 12 $ 9 $ 131,000 10 9 5 6 Separable processing cost $ 480,000 $ 119,000 $593,000 Required: 1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods: (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (d) the constant gross margin percentage method. (Round intermediate calculations and cost per unit answers to 4 decimal places. Round your final answers to whole dollar amounts. Negative amounts should be indicated with a minus sign.) a. Physical Measure Method Cost per unit Total gross margin b. Sales Value at Split-Off Method Cost per unit Total gross margin c. Net Realizable Value Method Cost per unit Total gross margin d. Constant Gross Margin Method Cost per unit Total gross margin A101 A204 B216

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 $3,209,000. Gallons sold A101 201,000 A204 187,000 B216 Final sales price per gallon Price at split-off $ 12 $ 9 $ 131,000 10 9 5 6 Separable processing cost $ 480,000 $ 119,000 $593,000 Required: 1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods: (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (d) the constant gross margin percentage method. (Round intermediate calculations and cost per unit answers to 4 decimal places. Round your final answers to whole dollar amounts. Negative amounts should be indicated with a minus sign.) a. Physical Measure Method Cost per unit Total gross margin b. Sales Value at Split-Off Method Cost per unit Total gross margin c. Net Realizable Value Method Cost per unit Total gross margin d. Constant Gross Margin Method Cost per unit Total gross margin A101 A204 B216

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter11: Linear Optimization Models
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Problem 1P: Kelson Sporting Equipment, Inc., makes two types of baseball gloves: a regular model and a catchers...
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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 $3,209,000. Gallons sold A101 201,000 A204 187,000 B216 Final sales price per gallon Price at split-off $ 12 $ 9 $ 131,000 10 9 5 6 Separable processing cost $ 480,000 $ 119,000 $593,000 Required: 1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods: (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (d) the constant gross margin percentage method. (Round intermediate calculations and cost per unit answers to 4 decimal places. Round your final answers to whole dollar amounts. Negative amounts should be indicated with a minus sign.) a. Physical Measure Method Cost per unit Total gross margin b. Sales Value at Split-Off Method Cost per unit Total gross margin c. Net Realizable Value Method Cost per unit Total gross margin d. Constant Gross Margin Method Cost per unit Total gross margin A101 A204 B216
Transcribed Image Text: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 $3,209,000. Gallons sold A101 201,000 A204 187,000 B216 Final sales price per gallon Price at split-off $ 12 $ 9 $ 131,000 10 9 5 6 Separable processing cost $ 480,000 $ 119,000 $593,000 Required: 1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods: (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (d) the constant gross margin percentage method. (Round intermediate calculations and cost per unit answers to 4 decimal places. Round your final answers to whole dollar amounts. Negative amounts should be indicated with a minus sign.) a. Physical Measure Method Cost per unit Total gross margin b. Sales Value at Split-Off Method Cost per unit Total gross margin c. Net Realizable Value Method Cost per unit Total gross margin d. Constant Gross Margin Method Cost per unit Total gross margin A101 A204 B216
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