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 26,000 pounds of Alpha at a total cost of $102,000. The output of the process consisted of 30,150 units of product X, 36,850 units of product Y, and 7,400 units of by-product Z. By-product Z can be sold for $10,800. 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
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 26,000 pounds of Alpha at a total cost of $102,000. The output of the process consisted of 30,150 units of product X, 36,850 units of product Y, and 7,400 units of by-product Z. By-product Z can be sold for $10,800. 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 26,000 pounds of Alpha at a total cost of $102,000. The output of the process consisted of 30,150 units of product X, 36,850 units of product Y, and 7,400 units of by-product Z. By-product Z can be sold for $10,800. This is considered to be its net realizable value, which is deducted from the
Required:
What amount of joint costs should be assigned to each of product X and product Y?
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