Qw.69. RequirementsHow much of the joint costs per batch will be allocated to methanol andto turpentine, assuming that joint costs are allocated based on the number ofgallons at splitoff point?2.If joint costs are allocated on an NRV basis, how much of the joint costs willbe allocated to methanol and to turpentine?1.3.4.Prepare product-line income statements per batch for requirement 1 and 2.Assume no beginning or ending inventories.The company has discovered an additional process by which themethanol (wood alcohol) can be made into a pleasant-tasting alcoholicbeverage. The selling price of this beverage would be $45 a gallon. Additionalprocessing would increase separable costs $6 per gallon (in addition to the$2 per gallon separable cost required to yield methanol). The company wouldhave to pay excise taxes of 20% on the selling price of the beverage.Assuming no other changes in cost, what is the joint cost applicable to thewood alcohol (using the NRV method)? Should the company produce thealcoholic beverage? Show your computations.X The Sweeney Spirits Company produces two products-methanol (wood alcohol) and turpentine-by a joint process. Joint costs amount to $116,000 per batch of output. Each batch totals 13,000gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $2 per gallon, and turpentine, $1 pergallon. Methanol sells for $20 per gallon. Turpentine sells for $15 per gallon.Read the requirements.Requirement 1. How much of the joint costs per batch will be allocated to methanol and to turpentine, assuming that joint costs are allocated based on the number of gallons at splitoff point? (Roundthe weights to five decimal places.)Physical measure of total productionWeightingJoint costs allocatedMethanol TurpentineTotal

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The Sweeney Spirits Company produces two products-methanol (wood alcohol) and turpentine-by a joint process. Joint costs amount to $116,000 per batch of output. Each batch totals 13,000 gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $2 per gallon, and turpentine, $1 per gallon. Methanol sells for $20 per gallon. Turpentine sells for $15 per gallon. Read the requirements. Requirement 1. How much of the joint costs per batch will be allocated to methanol and to turpentine, assuming that joint costs are allocated based on the number of gallons at splitoff point? (Round the weights to five decimal places.) Physical measure of total production Weighting Joint costs allocated Methanol Turpentine …... Total

The Sweeney Spirits Company produces two products-methanol (wood alcohol) and turpentine-by a joint process. Joint costs amount to $116,000 per batch of output. Each batch totals 13,000 gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $2 per gallon, and turpentine, $1 per gallon. Methanol sells for $20 per gallon. Turpentine sells for $15 per gallon. Read the requirements. Requirement 1. How much of the joint costs per batch will be allocated to methanol and to turpentine, assuming that joint costs are allocated based on the number of gallons at splitoff point? (Round the weights to five decimal places.) Physical measure of total production Weighting Joint costs allocated Methanol Turpentine …... Total

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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