What is the difference in profit if Lido decides to process further Product B, instead of selling it at split-off?
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Lido Products produces two products (A and B) from a joint process. The joint cost of production is $80,000. Five thousand units of Product A can be sold at split-off for $20 per unit or processed further at an additional cost of $20 000 and sold for $25 per unit. Ten thousand units of Product B can be sold at split-off for $15 per unit or processed further at an additional cost of $20,000 and sold for $16 per unit. What is the difference in profit if Lido decides to process further Product B, instead of selling it at split-off?
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- Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $42,000 per batch. The joint process produces 11,250 units of Chem-A with a market value of $135,000, and 20,000 units of Chem-B with a market value of $33,750. The conversion cost of the joint process is $13,400 per batch. Elsa Products allocates joint costs using the physical quantities method. The company never holds any inventory. Required: What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs? If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not unit) and profit will be reported for each product? How much will profit at Elsa Products increase or decrease if the company switches to the net realizable value method for allocating joint process costs?In a joint processing operation, Nolen Company manufactures three grades of sugar from a common input, sugar cane. Joint processing costs up to the split-off point total $41,800 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: raw sugar, $21,000; brown sugar, $21,000; and white sugar, $23,100. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Raw sugar Brown sugar White sugar Additional Processing Costs $ 21,200 $ 14,600 $ 5,300 Sales Value $40,500 Incremental profit (loss) $37,300 $44,400 Required: a. Compute the Incremental profit (loss) for each product. (Loss amounts should be indicated by a minus sign.) Raw Sugar Brown Sugar White SugarANSWER DON'T PROVIDE IN IMAGE FORMAT
- Wexpro, Incorporated, produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $71,000 per ton, one-fourth of which is allocated to product X15. Six thousand five hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $8,800 and then sold for $22 each. Required: 1. What is the financial advantage (disadvantage) of further processing product X15? 2. Should product X15 be processed further or sold at the split-off point? 1. 2. Product X15 should beIn a joint processing operation, Scarecrow Gardens Ltd. manufactures three varieties of products from a common input, corn. Joint processing costs up to the split-off point total $90,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: whole corn $57,000; dried corn kernels $65,000; and ground corn meal $74,500. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Additional Processing Costs Sales Value Whole Corn $27,175 $95,250 Dried Corn Kernels $29,760 $104,470 Ground Corn Meal $20,400 $92,300 REQUIRED: Which product or products should be sold at the split-off point, and which product or products should be processedfurther. Explain why…Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs ofthis process were $50,000, and 14,000 units of overs and 36,000 units of unders were produced.Separable processing costs beyond the split-off point were as follows: overs, $18,000; unders,$23,040. Overs sell for $2.00 per unit; unders sell for $3.14 per unit.Required:1. Allocate the $50,000 joint costs using the estimated net realizable value method.2. Suppose that overs could be sold at the split-off point for $1.80 per unit. Should Pacheco sellovers at split-off or process them further? Show supporting computations.
- Differential Chemical produced 10,500 gallons of Preon and 14,000 gallons of Paron. Joint costs incurred in producing the two products totaled $8,000. At the split-off point, Preon has a market value of $8.00 per gallon and Paron $4.00 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used.In a joint processing operation, Nolen Company manufactures three grades of sugar from a common input, sugar cane. Joint processing costs up to the split-off point total $41,900 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: raw sugar, $22,400; brown sugar, $22,400; and white sugar, $21,200. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Raw sugar Additional Processing Costs Sales Value $ 20,300 $40,900 Brown sugar $ 13,600 $37,000 white sugar $ 7,000 $41,600 Required: a. Compute the Incremental profit (loss) for each product. (Loss amounts should be indicated by a minus sign.) Raw Sugar Brown Sugar White Sugar Incremental profit (loss) b. Which product or…Johnson Glass Inc. manufactures two products from a joint process: wine glasses and drinking glasses. Wine glasses are allocated $7,900 of the total joint costs of $26,000. There are 3,500 wine glasses produced and 3,500 drinking glasses produced each year. Wine glasses can be sold at the split-off point for $5 per unit, or they can be hand painted for additional processing costs of $8,600 and sold for $9.50 for each deluxe wine glass. If the wine glasses are processed further and made into deluxe wine glasses, the effect on operating income would be $15,750 net increase in operating income. $15,750 net decrease in operating income. $7,150 net increase in operating income. $7,150 net decrease in operating income.
- Canada corporation manufactures three products X,Y &Z from a joint process. February production is 4,000 X; 7,000 Y; and 8,000 Z. Respective per unit selling prices at splitoff are $15, $10, and $5. Joint costs up to the splitoff point are $75,000. If joint costs are allocated based upon the sales value at splitoff, what ?amount of joint costs will be allocated to Z .a $28,125 .b $26,471 .C $30,882 .d $17,647Assume a company has two products—A and B—that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $14,800 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A? Multiple Choice $(3,200) $3,200 $(22,000) $22,000Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split- off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this process is as follows: Sales Price at split-off point Allocated joint costs Sales Price after further processing Cost of further processing Product Quantity Product 1 $16 $6,000 $20 $5,330 1,000 lb. Product 2 $12 $6,000 $18 $2,050 1,000 lb. Product 3 $5 $6,000 $14 $2,530 1,000 lb. Q: What would be the additional amount of profit that more profitable to process further rather than be sold at the split-off point? A: $ Corp, would gain from further processing the product(s) that is/are
