Presley produces three products from a joint process. The joint process has total costs of $500,000 per month. All three products, A, B, C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Units Immediate Sales Price Later Sales Prices Unit cost of Further Processing 5,000 $15 17,500 $20 10,000 $25 What is the total benefit the company would experience by following your recommendations vs. not processing any further? Hint: Give the sum of the benefits from each product you have chosen to process further. 1 2 3 $20 $25 $32 $6 $4 $3

Presley produces three products from a joint process. The joint process has total costs of $500,000 per month. All three products, A, B, C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Units Immediate Sales Price Later Sales Prices Unit cost of Further Processing 5,000 $15 17,500 $20 10,000 $25 What is the total benefit the company would experience by following your recommendations vs. not processing any further? Hint: Give the sum of the benefits from each product you have chosen to process further. 1 2 3 $20 $25 $32 $6 $4 $3

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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Kingston Specialty Corporation manufactures joint products P and Q. During a recent period, joint costs amounted to $90,000 in the production of 20,000 gallons of P and 50,000 gallons of Q. Kingston can sell P and Q at split-off for $2.00 per gallon and $2.20 per gallon, respectively. Alternatively, both products can be processed beyond the split-off point, as follows: P Q Separable processing costs $ 22,000 $ 42,000 Sales price (per gallon) if processed beyond split-off $ 4 $ 6 what woulkd be the joint cost allocated to Q under the relative-sales-value method ? Note: Do not round intermediate calculations.
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Cobe Company has already manufactured 22,000 units of Product A at a cost of $15 per unit. The 22,000 units can be sold at this stage for $460,000. Alternatively, the units can be further processed at a $220,000 total additional cost and be converted into 5,100 units of Product B and 11,600 units of Product C. Per unit selling price for Product B is $103 and for Product C is $52. 1. Prepare an analysis that shows whether the 22,000 units of Product A should be processed further or not? Sales Relevant costs: Total relevant costs Income (loss) Sell as is $ 460,000 Incremental net income (or loss) if processed further The company should Process Further
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Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchase in 1,000-gallon drums for $2,000. Processing costs are $3,000 to process the 1,000 gallons of Duo into 800 gallons of Big and 200 gallons of Mini. The selling price is $9 per gallon for Big and $4 per gallon for Mini. If the sales value at split-off method is used to allocate joint costs to the final products, the per-gallon cost (rounded to the nearest cent) of producing Big is Select one: a. $5.00 per gallon. b. $5.63 per gallon. c. $4.50 per gallon. X d. $3.38 per gallon.