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.
Sell or Process Further Port Allen Chemical Company processes raw material D into joint products E and F. Raw material D costs $6 per liter. It costs $100 to convert 100 liters of D into 60 liters of E and 40 liters of F. Product F can be sold immediately for $6 per liter or processed further into Product G at an additional cost of $4 per liter. Product G can then be sold for $14 per liter. Determine whether Product F should be sold or processed further into Product G. • Calculate the net advantage (disadvantage) of further processing • Use a negative sign with your answer to indicate a net disadvantage (if applicable). $0 per liter
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $45,500 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $27,300 $ 18,200 $ 45,500 Sales value at split-off point $ 30,000 $20,000 $50,000 Costs of further processing $ 24,200 $ 18,500 $ 42,700 Sales value after further processing $ 47,800 $58,300 $ 106,100 Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d.…
Chemical Corporation produces liquid chemicals A and B from a joint process. Joint costs are allocated on the basis of relative sales value at split-off. It costs $4,560 to process 500 gallons of Product A and 1,000 gallons of Product B to the split-off point. The market value at split-off is $10 per gallon for Product A and $14 for Product B. Product B requires an additional process beyond split-off at a cost of $2 per gallon before it can be sold. What is Chemical's cost to produce 1,000 gallons of Product B? Choose... Choose... $4,860 $5,360 $3,360 $5,040
Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for Product MTV is five units per hour. The machine’s capacity is 2,600 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 4,420 units of Product TLX and 5,995 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. $ per unit Product TLX Product MTV Selling price per unit $ 11.50 $ 6.90 Variable costs per unit 3.45 4.14 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)
Corey Corporation manufactures joint products W and X. During a recent period, joint costs amounted to $320,000 in the production of 25,000 gallons of W and 60,000 gallons of X. Both products will be processed beyond the split-off point, giving rise to the following data: W X Separable processing costs $ 45,000 $ 150,000 Sales price (per gallon) if processed beyond split-off $ 15 $ 13 What would be the joint cost allocated to X under the net-realizable-value method ? Note: Do not round intermediate calculations.
Dinesh
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.
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