Lauren Inc. makes three products that can be sold at split-off or processed further and then sold. The joint cost for April is $1,080,000.Bottles of Sales Price Separate Cost Final SalesOutput at Split-Off after Split-Off20,000Perfume$7.00$2.50Price$16.5013.00Eau de toilette32,0005.001.50Body splash28,0005.002.0012.00The number of ounces in a bottle of each product is: perfume, one; eau de toilette, two; and body splash, three. Assume that all products are processed further after split-off.Producta. Allocate the joint cost based on the number of bottles, weight, and approximated net realizable values at split-off.

Allocation of Joint Cost :There are so many expenses incurred when producing products, general…

Answered: Lauren Inc. makes three products that…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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6 Delite Confectionary Company produces various types of candies. Several candies could be sold at the split-off point or processed further and sold in a different form after further processing. The candies are produced in a joint processing operation with $500,000 of joint processing costs monthly, which are allocated based on pounds produced. Information concerning this process for a recent month appears below: -- ૦૦૧ Price per pound at split-off $8 $10 $5 Further Price after Number of pounds 50,000 processing costs $ 75,000 Chocolate Delight 100,000 $ 30,000 Minty Wonders 25,000 $ 20,000 The net advantage (disadvantage) of processing Sweet Meats further is: Candy type Sweet Meats processing further $ 10.00 $10.50 $5.50
A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,700. 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: Product Gallons Further ProcessingCost per Gallon Eventual MarketPrice per Gallon L-Ten 3,400 $0.40 $2.10 Triol 3,900 1.10 5.30 Pioze 2,400 1.60 6.60 Required: 1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation L-Ten $fill in the blank 1 Triol fill in the blank 2 Pioze fill in the blank 3 Total $fill in the blank 4 2. What if it cost $2.10 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your…
Atlas Foods produces three supplemental food products simultaneously through a refining process costing $85,000. The joint products, Alfa and Betters, have a final selling price of $8 per pound and $5 per pound, respectively, after additional processing costs of $3 per pound of each product are incurred after the split-off point. Morefeed, a by-product, is sold at the split- off point for $2.50 per pound. Additional information are as follows: Alfa - 15,000 pounds of Alfa, a popular but relatively rare grain supplement of having a caloric value of 8,800 calories/pound. Betters - 5,000 pounds of Betters, a flavouring material high in carbohydrates with a caloric value of 12,000 calories/pound. Morefeed - 2,000 pounds of Morefeed, used as a cattle feed supplement with a caloric value of 1,000 calories/pound. Questions: 1. Assuming Atlas Foods does not inventory Morefeed, the by-product, the joint cost to be allocated to Betters using the net realizable method is?
Old Jeans, Incorporated, has two divisions or profit centers, one makes regular fit jeans and the other makes relaxed fit jeans. The information for the two centers for the month of May follows: Regular fit Relaxed fit Sales $ 400,000 $ 175,000 Variable cost (as a % of Sales) 40% 50% Traceable fixed costs $ 40,000 $ 70,000 There are also common fixed costs of $27,500. Required: Prepare a responsibility income statement by profit center and in total.
Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: Product Unit SellingPrice Unit VariableCost Unit ContributionMargin X $110 $70 $40 Y 70 50 20 For break-even analysis, the unit contribution margin of E was a.$60.00 b.$40.00 c.$22.50 d.$20.00
Fact Pattern: Atlas Foods produces the following three supplemental food products simultaneously through a refining process costing $93,000. The joint products, Alfa and Betters, have a final selling price of $4 per pound and $10 per pound, respectively, after additional processing costs of $2 per pound of each product are incurred after the split-off point. Morefeed, a by- product, is sold at the split-off point for $3 per pound. O A. $60,000 $31,000 $3,000 $30,000 O B. C. Alfa D. Betters Assuming Atlas Foods inventories Morefeed, the by-product, the joint cost to be allocated to Alfa using the net realizable value method is 10,000 pounds of Alfa, a popular but relatively rare grain supplement having a caloric value of 4,400 calories per pound 5,000 pounds of Betters, a flavoring material high in carbohydrates with a caloric value of 11,200 calories per pound Morefeed 1,000 pounds of Morefeed, used as a cattle feed supplement with a caloric value of 1,000 calories per pound
The Happy Wimp Co. is in the business of processing corn into oil, sugar, meal, and chaff. Each month the Happy Wimp Co. processes 20,000 pounds. The yields, additional processing costs, and selling prices are: Sales Value at Product Yield Split-off Point Oil 200 lbs. $1.25 Sugar 200 lbs. .80 Meal 500 lbs..40 Chaff 100 lbs..10 Added Costs Price per lb. .50 per lb. $2.00 .30 per lb. 1.30 .60 .10 .20 per lb. 0 Joint processing costs per 1,000 pounds are: raw materials $100, labor $80, and depreciation $4,000/20 = $200; Total $380. Required: a.) Allocate the total joint costs to the different products according to the four allocation methods. Treat chaff as a main product. b.) Allocate the total joint costs to the different products according to the four allocation methods. Treat chaff as a by-product.
Costs of Different Customer Classes Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of $50 per case (a case contains 24 cans of nuts). Kaune sold 154,000 cases last year to the following three classes of customer: Customer Price perCase CasesSold Supermarkets $63 80,000 Small grocers 94 44,000 Convenience stores 89 30,000 The supermarkets require special labeling on each can costing $0.02 per can. They order through electronic data interchange (EDI), which costs Kaune about $58,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs $40,000 per year. The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds $20 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers…
Tropikal Co makes fizzy drinks. One of its products, the Opop, requires the following standard input for a litre of output: Materials Litres Cost per litre ($) ($) Carbonated water 1.50 0.90 0.6 0.3 Flavoured syrup 2.00 0.60 Sugar water 0.3 0.80 0.24 1.2 1.74 During June, 6,000 litres of the Opop were made and sold using the following inputs: Materials Actual litres used Actual cost per litre ($) Carbonated water 3,800 1.40 Flavoured syrup 1,400 2.10 Sugar water 1,500 0.95 6,700 What was the favourable yield variance for the Opop for June? Select... V Select... $725 $740 $15 $732
Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $360,000 for a standard production run that generates 170,000 pints of Smooth Skin and 300,000 pints of Silken Skin. Smooth Skin sells for $3.20 per pint, while Silken Skin sells for $5.20 per pint. Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method? 2. If no separable costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin using the physical measure method? 3. If separable processing costs beyond the split-off point are $1.80 per pint for Smooth Skin and $1.70 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin using a net realizable value method? 4. If separable processing costs beyond the split-off…
Scotland Beauty Products manufactures face cream, body lotion, and liquid soap in a joint manufacturing process. At the split-off point, the company has 300 pounds of face cream with a market value of $15 per pound, 200 pounds of body lotion with a market value of $13 per pound, and 300 pounds of liquid soep with a market value of $7 per pound and has incurred $200,000 in joint costs. Round percentages in intermediate steps to the nearest whole percentage. Using the market value at split-off method, allocate the joint costs to a. Face Cream b. Body Lotion c. Liquid Soap

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