Joint Products; By-Products (Appendix) The Marshall Company has a joint production process that produces two joint products and a by-product. The joint products are Ying and Yang, andthe by-product is Bit. Marshall accounts for the costs of its products using the net realizable valuemethod. The two joint products are processed beyond the split-off point, incurring separable processing costs. There is a $1,000 disposal cost for the by-product. A summary of a recent month’s activityat Marshall is shown below:Ying Yang BitUnits sold 50,000 40,000 10,000Units produced 50,000 40,000 10,000Separable processing costs—variable $140,000 $42,000 $—Separable processing costs—fixed $10,000 $8,000 $—Sales price $6.00 $12.50 $1.60Total joint costs for Marshall in the recent month are $265,000, of which $115,000 is a variable cost.Required1. Calculate the manufacturing cost per unit for each of the three products.2. Calculate the total gross margin for each product
Joint Products; By-Products (Appendix) The Marshall Company has a joint production process that produces two joint products and a by-product. The joint products are Ying and Yang, andthe by-product is Bit. Marshall accounts for the costs of its products using the net realizable valuemethod. The two joint products are processed beyond the split-off point, incurring separable processing costs. There is a $1,000 disposal cost for the by-product. A summary of a recent month’s activityat Marshall is shown below:Ying Yang BitUnits sold 50,000 40,000 10,000Units produced 50,000 40,000 10,000Separable processing costs—variable $140,000 $42,000 $—Separable processing costs—fixed $10,000 $8,000 $—Sales price $6.00 $12.50 $1.60Total joint costs for Marshall in the recent month are $265,000, of which $115,000 is a variable cost.Required1. Calculate the manufacturing cost per unit for each of the three products.2. Calculate the total gross margin for each product
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Joint Products; By-Products (Appendix) The Marshall Company has a joint production process that produces two joint products and a by-product. The joint products are Ying and Yang, and
the by-product is Bit. Marshall accounts for the costs of its products using the net realizable value
method. The two joint products are processed beyond the split-off point, incurring separable
at Marshall is shown below:
Ying Yang Bit
Units sold 50,000 40,000 10,000
Units produced 50,000 40,000 10,000
Separable processing costs—variable $140,000 $42,000 $—
Separable processing costs—fixed $10,000 $8,000 $—
Sales price $6.00 $12.50 $1.60
Total joint costs for Marshall in the recent month are $265,000, of which $115,000 is a variable cost.
Required
1. Calculate the
2. Calculate the total gross margin for each product
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
| Problem 7-48 | The MARSHALL Company | ||||
| Production & Sales Data | |||||
| Details | Ying | Yang | Bit | Total | |
| Units sold | 50,000 | 40,000 | 10,000 | 100,000 | |
| Units produced | 50,000 | 40,000 | 10,000 | 100,000 | |
| Separable |
$140,000.00 | $42,000.00 | $0.00 | $182,000.00 | |
| Separable Processing Cost - fixed | $10,000.00 | $8,000.00 | $0.00 | $18,000.00 | |
| Sales Price | $6.00 | $12.50 | $1.60 | ||
| Total Joint Cost | $265,000.00 | ||||
| Byproduct Revenue | $16,000 | ||||
| Disposal cost of Byproduct | $1,000 | $15,000 | |||
| Adjusted Joint Cost to Allocate | $250,000 | ||||
| c. Net Realizable Value | |||||
| Joint Cost Allocation | Ying | Yang | Bit | Total | |
| Expected Revenue | $300,000 | $500,000 | $16,000 | ||
| Separable Processing Cost | $150,000 | $50,000 | |||
| Net Realizable Value | $150,000 | $450,000 | $600,000 | ||
| Ratio | 25% | 75% | |||
| Allocated Joint Cost | $62,500 | $187,500 | $250,000 | ||
| Separable Processing Cost | $150,000 | $50,000 | $0 | ||
| Total Cost | $212,500 | $237,500 | $0 | ||
| Cost per Unit (unit) | $4.25 | $5.94 | $1.50 | ||
| adjusted byproduct against COGS | |||||
| Gross Margin Calculation | Ying | Yang | Bit | Total | |
| Revenue | $300,000 | $500,000 | $800,000 | ||
| Allocated Joint Cost | $62,500 | $187,500 | $250,000 | ||
| Separable Processing Cost | $150,000 | $50,000 | $200,000 | ||
| Cost of Goods Sold | $212,500 | $237,500 | $0 | $450,000 | |
| Gross Profit | $87,500 | $262,500 | $0 | $350,000 | |
| Gross Margin | 29% | 53% | 43.75% | ||
| byproduct shown in other income | |||||
| Gross Margin Calculation | Ying | Yang | Bit | Total | |
| Revenue | $300,000 | $500,000 | $800,000 | ||
| Allocated Joint Cost | $66,250 | $198,750 | $265,000 | ||
| Separable Processing Cost | $150,000 | $50,000 | $200,000 | ||
| Cost of Goods Sold | $216,250 | $248,750 | $0 | $465,000 | |
| Gross Profit | $83,750 | $251,250 | $0 | $335,000 | |
| Gross Margin | 28% | 50% | |||
| Other Income / Expense | |||||
| Revenue | $16,000 | ||||
| Expense (Disposal) | $1,000 |
Solution
by Bartleby ExpertKnowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education