Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows: X Y Z Total Units produced 14,000 10,000 6,000 30,000 Allocated joint costs $ 204,000 $ 90,000 $ 66,000 $ 360,000 Sales value at split-off ? 150,000 110,000 600,000 Additional costs for further processing 38,000 30,000 22,000 90,000 Sales value if processed further 348,000 185,000 147,000 680,000 Based solely on a relevant cost analysis, which of the three products should be processed by Walman beyond the split-off point?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
- Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows:
|
|
|
X |
|
Y |
|
Z | Total | |
|
Units produced |
|
14,000 |
|
10,000 |
|
6,000 |
|
30,000 |
|
Allocated joint costs |
$ |
204,000 |
$ |
90,000 |
$ |
66,000 |
$ |
360,000 |
|
Sales value at split-off |
|
? |
|
150,000 |
|
110,000 |
|
600,000 |
|
Additional costs for further processing |
|
38,000 |
|
30,000 |
|
22,000 |
|
90,000 |
|
Sales value if processed further |
|
348,000 |
|
185,000 |
|
147,000 |
|
680,000 |
Based solely on a relevant cost analysis, which of the three products should be processed by Walman beyond the split-off point?
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