Homework Help is Here – Start Your Trial Now!
Business
Accounting
rchase salt gh there is chlorine it alt, caustic and sales tons PVC : PVC under e method. PVC under what is the f chlorine in es data are

rchase salt gh there is chlorine it alt, caustic and sales tons PVC : PVC under e method. PVC under what is the f chlorine in es data are

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

i just want answers of 3&4

Q3. (Horngren) Inorganic Chemicals (IC) processes salt into various industrial products. In July 2020, IC incurred joint costs of $100,000 to purchase salt and convert it into two products: caustic soda and chlorine. Although there is an active outside market for chlorine, IC processes all 800 tons of chlorine it produces into 500 tons of PVC (polyvinyl chloride), which is then sold. There were no beginning or ending inventories of salt, caustic soda, chlorine, or PVC in July. Information for July 2012 production and sales follows: Joint Costs : &100,000 Caustic Soda :1,200 tons, $50/ton Chlorine : 800 tons, $75 PVC : 500 tons, $200 Separable cost of processing 800 tons chlorine into 500 tons PVC : $20,000 Instructions, Determine. 1. Allocate the joint costs of $100,000 between caustic soda and PVC under (a) the sales value at split off method and (b) the physical-measure method. 2. Allocate the joint costs of $100,000 between caustic soda and PVC under the NRV method. 3. Under the three allocation methods in requirements 1 and 2, what is the gross-margin percentage of (a) caustic soda and (b) PVC? 4. Lifetime Swimming Pool Products offers to purchase 800 tons of chlorine in August 2020 at $75 per ton. Assume all other production and sales data are the same for August as they were for July. This sale of chlorine to Lifetìme would mean that no PVC would be produced by IC in August. How would accepting this offer affect IC 's August 2020 operating income?
Transcribed Image Text:Q3. (Horngren) Inorganic Chemicals (IC) processes salt into various industrial products. In July 2020, IC incurred joint costs of $100,000 to purchase salt and convert it into two products: caustic soda and chlorine. Although there is an active outside market for chlorine, IC processes all 800 tons of chlorine it produces into 500 tons of PVC (polyvinyl chloride), which is then sold. There were no beginning or ending inventories of salt, caustic soda, chlorine, or PVC in July. Information for July 2012 production and sales follows: Joint Costs : &100,000 Caustic Soda :1,200 tons, $50/ton Chlorine : 800 tons, $75 PVC : 500 tons, $200 Separable cost of processing 800 tons chlorine into 500 tons PVC : $20,000 Instructions, Determine. 1. Allocate the joint costs of $100,000 between caustic soda and PVC under (a) the sales value at split off method and (b) the physical-measure method. 2. Allocate the joint costs of $100,000 between caustic soda and PVC under the NRV method. 3. Under the three allocation methods in requirements 1 and 2, what is the gross-margin percentage of (a) caustic soda and (b) PVC? 4. Lifetime Swimming Pool Products offers to purchase 800 tons of chlorine in August 2020 at $75 per ton. Assume all other production and sales data are the same for August as they were for July. This sale of chlorine to Lifetìme would mean that no PVC would be produced by IC in August. How would accepting this offer affect IC 's August 2020 operating income?
Expert Solution
steps

Step by step

Solved in 3 steps with 10 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Techniques of Time Value Of Money
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS