Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 29,000 pounds of Alpha at a total cost of $105,000. The output of the process consisted of 31,500 units of product X, 38,500 units of product Y, and 7,700 units of by-product Z By-product Z can be sold for $20,040. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y? Product X Product Y Joint Costs
Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 29,000 pounds of Alpha at a total cost of $105,000. The output of the process consisted of 31,500 units of product X, 38,500 units of product Y, and 7,700 units of by-product Z By-product Z can be sold for $20,040. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y? Product X Product Y Joint Costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company
chooses to allocate the costs on the basis of the physical quantities method.
Last month, it processed 29,000 pounds of Alpha at a total cost of $105,000. The output of the process consisted of 31,500 units of
product X, 38,500 units of product Y, and 7,700 units of by-product Z By-product Z can be sold for $20,040. This is considered to be
its net realizable value, which is deducted from the processing costs of the main products.
Required:
What amount of joint costs should be assigned to each of product X and product Y?
Product X
Product Y
Joint Costs
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