The following information relates to a joint production process for three products, with a total joint production cost of$125,000. There are no separable processing costs for any of the three products.Product123Sales Value atSplit-Off$ 150,000Product12362,50037,500$ 250,000Assume that the total sales value at the split-off point for product 1 is $62,500 instead of $150,000 and the sales value of product 3 is$2,500 instead of $37,500. Assume also that, because of its relatively low sales value, the firm treats product 3 as a by-product anduses the asset recognition method for accounting for by-products. What amount of joint cost would be allocated to the products usingthe sales value at split-off method?Units atSplit-Off3608401,2002,400Allocated JointCost The following information relates to a joint production process for three products, with a total joint production cost of$125,000. There are no separable processing costs for any of the three products.Product1WNIProduct12323Sales Value at Units atSplit-OffSplit-Off$ 150,00036062,50084037,5001,200$ 250,0002,400Assume that the total sales value at the split-off point for product 1 is $62,500 instead of $150,000 and the sales value of product 3 is$2,500 instead of $37,500. Assume also that the firm treats product 3 as a joint product and uses the net realizable value method foraccounting for joint costs. There are no separable processing costs for product 3. What amount of joint costs would be allocated to thethree products using the relative sales value method? (Round your intermediate percentage values to 2 decimal places (i.e. 24.35%)and final answers to nearest whole dollar amount.)Allocated JointCost

Relative sales value methodThe relative sales value method is a cost allocation approach that…

Answered: uses the asset recognition method for…

uses the asset recognition method for accounting for by-products. What amount of joint cost would be allocated to the products using the sales value at split-off method?

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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Question

The following information relates to a joint production process for three products, with a total joint production cost of
$125,000. There are no separable processing costs for any of the three products.
Product
1
2
3
Sales Value at
Split-Off
$ 150,000
Product
1
2
3
62,500
37,500
$ 250,000
Assume that the total sales value at the split-off point for product 1 is $62,500 instead of $150,000 and the sales value of product 3 is
$2,500 instead of $37,500. Assume also that, because of its relatively low sales value, the firm treats product 3 as a by-product and
uses the asset recognition method for accounting for by-products. What amount of joint cost would be allocated to the products using
the sales value at split-off method?
Units at
Split-Off
360
840
1,200
2,400
Allocated Joint
Cost

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