The Armstrong Company uses a joint process toproduce products A, B, C, and D. Each product maybe sold at its split-off point or processed further. Jointprocessing costs for a single batch of joint productsare $120,000. Other relevant data are:AdditionalSales ValueSales Value atProductProcessingAfterSplit-OffCostsProcessingA$25,000$12,000$48,000B24,00016,00036,000C44,00028,00070,000D17,00010,00032,000Determine when each product should be sold. Showcalculations to support your answers.

Explanation of Further Processing Cost: Further processing costs refer to the additional expenses…

Answered: The Armstrong Company uses a joint…

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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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.…
Denver Fabricators manufactures products DF1 and DF2 from a joint process, which also yields a by-product, BP. The company accounts for the revenues from its by-product sales as other income. Additional information follows: Units produced Allocated joint costs Sales value at split-off DF1 DF2 BP DF1 27,300 ? DF2 18,300 ? $ 563,250 $ 187,750 Joint Cost BP 15,300 ? $ 102,300 Total Required: Assuming that joint product costs are allocated using the net realizable value at split-off approach, what joint costs are allocated to each of the joint products DF1 and DF2 and to the by-product, BP? Note: Do not round intermediate calculations. 60,900 $ 560,300 $ 853,300
company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output 10,000 pounds A 4 per pound B 7 per pound 22,000 pounds 5,000 gallons 12 per gallon Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Processing Costs Product Selling Price A $ $ 53,000 38,000 B $ $ с $ 18,000 $ Which products should be processed further? 7 per pound 11 per pound 18 per gallon
Milo Manufacturing produces products Kappa and Lambda from a joint process. Total joint costs are $168,000. The sales value at split-off was $174,960 for 8,400 units of Kappa and $63,280 for 12,600 units of Lambda. Required: What joint costs are allocated to the two products using the net realizable value at split-off approach? Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts. What joint costs are allocated to the two products using the physical quantities method? Note: Do not round intermediate calculations. Kappa Lambda a. Net realizable value method ??? ??? b. Physical quantities method ??? ???
Split Company produces three products-X, Y, and Z-from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond split-off. Joint production costs for the year were $130,000. Sales values and costs needed to evaluate Split's production policy follow. Product X y Z A. $27,132. B. $32,143. C. $37,143. D. $43,788. E. $60,714. OA B C Units Produced 14,000 7,500 3,500 OD Sales Value at Split Off $42,500 22,500 26,000 If Processed Further Sales Value $ 92,500 47,500 40,000 The amount of joint costs allocated to product Y using the sales value at split-off method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): Additional Costs $ 3,700 8,000 9,000
Dinesh
Assume a company has two products—A and B—that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $14,800 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A? Multiple Choice $(3,200) $3,200 $(22,000) $22,000
Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split- off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this process is as follows: Sales Price at split-off point Allocated joint costs Sales Price after further processing Cost of further processing Product Quantity Product 1 $16 $6,000 $20 $5,330 1,000 lb. Product 2 $12 $6,000 $18 $2,050 1,000 lb. Product 3 $5 $6,000 $14 $2,530 1,000 lb. Q: What would be the additional amount of profit that more profitable to process further rather than be sold at the split-off point? A: $ Corp, would gain from further processing the product(s) that is/are
PT Y manufactures three products using the same production process. The costs incurred up to the split-off point are $200,000. The company decided to further process the three products before they were sold. The number of units produced (based on regular sales), the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows. Product D E F Number of Units Produced 4,000 6,000 2,000 Selling Price at Split-Off Additional Processing Costs Selling Price after Processing $25.00 $26.60 $34.40 $14,000 $20,000 $9,000 $30.00 $31.20 $37.60 Instructions 1) Allocate the $200,000 joint cost to product D, E, and F using these methods: a. Physical-measure method (2%) b. NRV method (5%) 2) Which information is relevant to the decision on whether or not to process the products further? (2%). Explain why this information is relevant (2%). 3) Which product(s) should be processed further and which should be sold at…
Sunland Inc. produces three separate products from a common process costing $100,100. Each of the products can be sold at the split- off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Product 10 Product 12 Product 14 (c) Product Your answer is partially correct. Product 10 Product 12 Product 14 $ Sales Value at Split-Off Point $59,700 $ 15,800 $ 55,400 Calculate incremental profit/(loss) and determine which products should be sold at the split-off point and which should be processed further. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Incremental profit (loss) Cost to Process Further eTextbook and Media $100,100 30,800 149,700 Sales Value after Further Processing $191,000 34,700 Decision 214,000 Should be processed further Should be sold at the split-off point Should be processed further Assistance Used
Integrity Company manufactures two joint products, R and F. Integrity produced 12,000 units of product R with a split-off sales value of P90,000. However, if R were to be processed further, additional cost of P6,000 will be incurred but the sales value will increase to P120,000. Integrity produced 6,000 units of product F with a split-off sales value of P60,000. However, if F were to be processed further, additional cost of P7,200 will be incurred but the sales value will go up to P72,000.Under the market value method, the allocation to product R from the total joint cost is P54,000. How much is the total joint cost?

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