Russell Company produces three products: U, V, and W from a joint manufacturing process. Each product may be sold at the split-off point or processed further. The total joint manufacturing costs amount to $300,000. Additional information is as follows:| Product | # Units | Sales Value at Split Off | Final Sales Value | Separable Processing Costs ||---------|---------|--------------------------|-------------------|----------------------------|| U | 12,400 | $7.50/unit | $8.00/unit | $30,852 || V | 21,700 | $15.00/unit | $16.00/unit | $24,988 || W | 31,000 | $16.50/unit | $20.00/unit | $34,160 |a. Determine the amount of joint costs allocated to each product using the Sales Value at Split-Off method.b. Determine the amount of joint costs allocated to each product using the Net Realizable Value method.c. What product mix combination of the production and sale of each product maximizes operating income for Russell, selling at Split-Off or Processing Further? Show calculations to support your answer.

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Russell Company produces three products: U, V and W from a joint manufacturing process. Each product may be sold at the split-off point or processed further. Total joint manufacturing costs equal $300,000. Additional information is as follows. Product # Units Sales Value Final Sales Separable at Split Off Value Processing Costs $8.00/unit $7.50/unit $15.00/Unit $16.00/unit $24,988 $16.50/unit $20.00/unit $34,160 U 12,400 $30,852 V 21,700 W 31,000 a. Determine the amount of joint costs allocated to each product using the Sales Values at Split-Off method. b. Determine the amount of joint costs allocated to each product using the Net Realizable Value method. c. What product mix combination of the production and sale of each product maximizes operating income for Russell, selling at Split-Off or Processing Further? Show calculations to support your answer.

Russell Company produces three products: U, V and W from a joint manufacturing process. Each product may be sold at the split-off point or processed further. Total joint manufacturing costs equal $300,000. Additional information is as follows. Product # Units Sales Value Final Sales Separable at Split Off Value Processing Costs $8.00/unit $7.50/unit $15.00/Unit $16.00/unit $24,988 $16.50/unit $20.00/unit $34,160 U 12,400 $30,852 V 21,700 W 31,000 a. Determine the amount of joint costs allocated to each product using the Sales Values at Split-Off method. b. Determine the amount of joint costs allocated to each product using the Net Realizable Value method. c. What product mix combination of the production and sale of each product maximizes operating income for Russell, selling at Split-Off or Processing Further? Show calculations to support your answer.

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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