Required: Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales value at split-off, and (3) net realizable value. (Do not round intermediate calculations. Round your final answers to nearest whole
Required: Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales value at split-off, and (3) net realizable value. (Do not round intermediate calculations. Round your final answers to nearest whole
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
None
Transcribed Image Text:Northern Company processes 100 gallons of raw materials into 75 gallons of product GS-50 and 25 gallons of GS-80. GS-50 is further
processed into 50 gallons of product GS-505 at a cost of $3,500, and GS-80 is processed into 50 gallons of product GS-805 at a cost
of $2,000.
The production process starts at point 1. A total of $20,000 in joint manufacturing costs are incurred in reaching point 2. Point 2 is the
split-off point of the process that manufactures GS-50 and GS-80. At this point, GS-50 can be sold for $350 a gallon, and GS-80 can
be sold for $70 a gallon. The process is completed at point 3-products GS-505 and GS-805 have a sales price of $510 a gallon and
$150 a gallon, respectively.
Required:
Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales
value at split-off, and (3) net realizable value. (Do not round intermediate calculations. Round your final answers to nearest whole
dollar amount.)
GS-50 cost GS-80 cost
Total cost
per unit
per unit
per unit
(1) Physical measure
$
200
$
200
$
400
(2) Sales value at split-off
$
250
$
50
$
300
GS-505 cost GS-805 cost
per unit
Total cost
per unit
per unit
(3) Net realizable value
$
405
$
(1,850) $ (1,445)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step 1: Definition Joint products
VIEWStep 2: Req #1 Allocation of Joint Cost and Calculation of Total Cost by using Physical measurement method
VIEWStep 3: Req #2 Allocation of Joint Cost and Calculation of Total Cost by sales value at split-off method
VIEWStep 4: Req #3 Allocation of Joint Cost and Calculation of total cost by Net realisable value method
VIEWSolution
VIEW
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education