Under these assumptions, the following product(s) should be processed further and then sold:
Under these assumptions, the following product(s) should be processed further and then sold:
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 4CMA: Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in...
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Exercise 11-42 (Algo) Sell or Process Further: Multiple Choice (LO 11-9)
Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,280 gallons of Chem-X with a cost of $115,200. Additional information regarding a batch follows.
If Processed Further | ||||||||||||
Product | Units Produced | Unit Sales Value at Split-off | Additional Costs (Per Unit) | Sales Value (Per Unit) | ||||||||
M-10 | 28,160 | $ | 20.00 | $ | 16.00 | $ | 20.00 | |||||
M-20 | 17,920 | $ | 24.00 | $ | 4.00 | $ | 44.00 | |||||
B-60 | 6,400 | $ | 0.50 | NA | NA | |||||||
Oak View Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs.
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Under these assumptions, the following product(s) should be processed further and then sold:
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