The MeltAway Company produces four unique chemicals from a joint process. The four chemicals are listed below. Chemical Phyllis 234 is not stable at the split off point so it has to be processed further before it is sold. Izzy900 is in its final form at the split-off and does not have an option to be processed further.The remaining chemicals may be sold at its split-off point or processed further. Joint processing costs for a single batch of the joint products are $145,600. Other relevant data are as follows: Product Liters Produced TotalSales Value At Split-Off Additional Processing Costs TotalSales Value of Final Product Kenan456 280 $70,000 $12,000 $94,680 Quinlan657 250 55,120 9,000 46,000 Phyllis234 450 0 28,000 96,900 Izzy900 220 68,900 0 0 Total 1,200 $ 194,020 $ 49,000 $ 237,580 REQUIRED 1. Determine which products should be processed further. 2. If it is determined to not process a product further, it will be sold at the split off point (see your answer to part 1). Allocate the joint cost to the four primary products using the approximated net realizable value method (round to whole dollars). 3. If all liters of each of the four chemicals are sold (either at the split off point or processed further as you determined in part 1) what is the gross profit of each product?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)

Problem -Joint Process

The MeltAway Company produces four unique chemicals from a joint process. The four chemicals are listed below. Chemical Phyllis 234 is not stable at the split off point so it has to be processed further before it is sold. Izzy900 is in its final form at the split-off and does not have an option to be processed further.The remaining chemicals may be sold at its split-off point or processed further. Joint processing costs for a single batch of the joint products are $145,600. Other relevant data are as follows:

Product	Liters Produced	TotalSales Value At Split-Off	Additional Processing Costs	TotalSales Value of Final Product
Kenan456	280	$70,000	$12,000	$94,680
Quinlan657	250	55,120	9,000	46,000
Phyllis234	450	0	28,000	96,900
Izzy900	220	68,900	0	0
Total	1,200	$ 194,020	$ 49,000	$ 237,580

*REQUIRED*
1. Determine which products should be processed further.


2. If it is determined to not process a product further, it will be sold at the split off point (see your answer to part 1). Allocate the joint cost to the four primary products using the approximated net realizable value method (round to whole dollars).


3. If all liters of each of the four chemicals are sold (either at the split off point or processed further as you determined in part 1) what is the gross profit of each product?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Decision to Sell before or after additional processing

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.

Similar questions