Joie Company manufactures two joint products R and S. Joie produced 12,000 units of R with an after split-off sales value of P45,000. However, if R were to be processed further, additional cost of P6,000 will be incurred but the sales value will increase to P60,000. Joie produced 6,000 units of S with an after split-off sales value of P30,000. However, if S were to be further processed, additional cost of P3,600 will be incurred but the sales value will go up to P36,000. Under the relative sale value at split-off approach, the allocation to R from the total product cost is P27,000. 21. What is the total joint product cost?

Joie Company manufactures two joint products R and S. Joie produced 12,000 units of R with an after split-off sales value of P45,000. However, if R were to be processed further, additional cost of P6,000 will be incurred but the sales value will increase to P60,000. Joie produced 6,000 units of S with an after split-off sales value of P30,000. However, if S were to be further processed, additional cost of P3,600 will be incurred but the sales value will go up to P36,000. Under the relative sale value at split-off approach, the allocation to R from the total product cost is P27,000. 21. What is the total joint product cost?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...

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Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were 50,000, and 14,000 units of overs and 36,000 units of unders were produced. Separable processing costs beyond the split-off point were as follows: overs, 18,000; unders, 23,040. Overs sell for 2.00 per unit; unders sell for 3.14 per unit. Required: 1. Allocate the 50,000 joint costs using the estimated net realizable value method. 2. Suppose that overs could be sold at the split-off point for 1.80 per unit. Should Pacheco sell overs at split-off or process them further? Show supporting computations.
Morrill Company produces two different types of gauges: a density gauge and a thickness gauge. The segmented income statement for a typical quarter follows. Includes depreciation. The density gauge uses a subassembly that is purchased from an external supplier for 25 per unit. Each quarter, 2,000 subassemblies are purchased. All units produced are sold, and there are no ending inventories of subassemblies. Morrill is considering making the subassembly rather than buying it. Unit-level variable manufacturing costs are as follows: No significant non-unit-level costs are incurred. Morrill is considering two alternatives to supply the productive capacity for the subassembly. 1. Lease the needed space and equipment at a cost of 27,000 per quarter for the space and 10,000 per quarter for a supervisor. There are no other fixed expenses. 2. Drop the thickness gauge. The equipment could be adapted with virtually no cost and the existing space utilized to produce the subassembly. The direct fixed expenses, including supervision, would be 38,000, 8,000 of which is depreciation on equipment. If the thickness gauge is dropped, sales of the density gauge will not be affected. Required: 1. Should Morrill Company make or buy the subassembly? If it makes the subassembly, which alternative should be chosen? Explain and provide supporting computations. 2. Suppose that dropping the thickness gauge will decrease sales of the density gauge by 10 percent. What effect does this have on the decision? 3. Assume that dropping the thickness gauge decreases sales of the density gauge by 10 percent and that 2,800 subassemblies are required per quarter. As before, assume that there are no ending inventories of subassemblies and that all units produced are sold. Assume also that the per-unit sales price and variable costs are the same as in Requirement 1. Include the leasing alternative in your consideration. Now, what is the correct decision?
Integrity Company manufactures two joint products, R and F. Integrity produced 12,000 units of product R with a split-off sales value of P90,000. However, if R were to be processed further, additional cost of P6,000 will be incurred but the sales value will increase to P120,000. Integrity produced 6,000 units of product F with a split-off sales value of P60,000. However, if F were to be processed further, additional cost of P7,200 will be incurred but the sales value will go up to P72,000.Under the market value method, the allocation to product R from the total joint cost is P54,000. How much is the total joint cost?
Joe Company Manufactures two products R and S. Joie produced 12,000 units of R with an after split off sales value of P45000. However, if R were to be processed further additional cost of P6,000 will be incurred but the sales increase to P60 000. Joie produced 6000 units of S with an after split off sales value of P30 000. However its were to be further processed, additional cost of 3600will be incurred but sales value will go up to 36000. Under the relative Sales value at split-off approach, the allocation to R from the total product cost is 27000. What is the total Joint Product cost?
Backer Company manufactures products Katran and Klare from a joint process. Product Katran has been allocated P7,500 of total joint costs of P30,000 for the 1,500 units produced. Katran can be sold at the splitoff point for P4 per unit, or it can be processed further with additional costs of P2,000 and sold for P7 per unit. If Katran is processed further and sold, the result would be A. a gain of P1,000 from further processing. B. a loss of P2,500 from further processing C. an overall loss of P1,500 D. a gain of P2,500 from further processing
A company manufactures products X and Y using a joint process. The joint processing costs are P10,000. Products X and Y can be sold at split-off for P12,000 and P8,000 respectively. After split-off, product X is processed further at a cost of P5,000 and sold for P21,000 whereas product Y is sold without further processing. If the company uses the net realizable value method for allocating joint costs, the joint cost allocated to X is
Double Company produces three products - DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows. Units Sold Price (after additional DBB-1 16,800 $65 $ 115,500 16,800 DBB-2 25,200 $ 25 processing) Separable Processing cost Units Produced Total Joint Cost Sales Price at Split-off The amount of joint costs allocated to product DBB-3 using the net realizable value method is: $ 50 $ 46,200 25,200 DBB-3 $ 35 37,200 $75 $ 68,200 37,200 $ 55 Total 79,200 $ 229,900 79,200 $ 3,760,000
Corey Corporation manufactures joint products W and X. During a recent period, joint costs amounted to $450,000 in the production of 20,000 gallons of W and 50,000 gallons of X. Both products will be processed beyond the split-off point, giving rise to the following data: Separable processing costs Sales price (per gallon) if processed beyond split-off The joint cost allocated to W under the net-realizable-value method would be: (Do not round intermediate calculations.) Multiple Choice $156,000. $142,105, $110,000 $128.571. $40,000 $ 15 $ $160,000 13
The Freed Company produces three products, X, Y, Z, from a single raw material input. Product Y can be sold at the split-off point for total revenues of $50,000, or it can be processed further at a total cost of $16,000 and then sold for $68,000. Product Y: А. Should be sold at the split-off point, rather than processed further. В. Would increase the company's overall net operating income by $18,000 if processed further and then sold. С. Would increase the company's overall net operating income by $68,000 if processed further and then sold. D. Would increase the company's overall net operating income by $2,000 if processed further and then sold. Е. None of the above
Integrity Company manufactures two products, Alpha and Beta from a joint process. One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta. Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit. The eventual market price for Alpha is P20 and for Beta, P10. If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha.
Integrity Company manufactures two products, Alpha and Beta from a joint process. One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta. Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit. The eventual market price for Alpha is P20 and for Beta, P10. If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha. a. P42,000 b. P18,000 c. P12,000 d. P38,000
Integrity Company manufactures two products, Alpha and Beta from a joint process. One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta. Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit. The eventual market price for Alpha is P20 and for Beta, P10. If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha. Choices: • P12,000 • P18,000 • P38,000 • P42,000