Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Textbook Question
Chapter 11, Problem 73P
Find Maximum Input Price: Estimated Net Realizable Value Method
Ticon Corporation’s manufacturing operation produces two joint products. Product delta sells for $24 per unit at the split-off point. After an additional $225,000 of
The joint process has only variable costs. In a typical month, the conversion costs of the joint products amount to $421,000. Materials prices are volatile, and if prices are too high, the company stops production.
Required
Management has asked you to determine the maximum price that the company should pay for the materials.
- a. Calculate the maximum price that Ticon should pay for the materials.
- b. Write a brief memo to management explaining how you arrived at your answer in requirement (a).
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Students have asked these similar questions
Jorioz Co makes joint products X and Y. $120,000 joint processing costs are incurred.
At the split-off point, 10,000 units of X and 9,000 units of Y are produced, with selling prices of $1.20 for X and $1.50 for Y.
The units of X could be processed further to make 8,000 units of product Z. The extra costs incurred in this process would be fixed costs of $1,600 and variable costs of $0.50 per unit of input.
The selling price of Z would be $2.25.
What would be the outcome if product X is further processed?
O $600 loss
$400 gain
O $3,900 gain
O $1,600 loss
A company currently produces three products from a joint process. The joint process has total costs of $280,000 per month. All three
products, A, B and C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue
on with additional processing and be sold as a more complete product. The following information is available:
Product
8
C
Units
44,000
88,000
132,000
Immediate
Sales Price
$8
10
6
Later Sales Unit Cost of Further
Processing
$6.00
Reg A1
Price
$ 13
Required:
a-1. Should Product A be sold immediately or sold after processing further?
a-2. How much will the decision affect profit?
15
9
b-1. Should Product B be sold immediately or sold after processing further?
b-2. How much will the decision affect profit?
Req B1
c-1. Should Product C be sold immediately or sold after processing further?
c-2. How much will the decision affect profit?
Complete this question by entering your answers in the tabs below.
Reg A2
Req 82
Should…
The Freed Company produces three products, X, Y, Z, from a single raw material input. Product Y can be sold at the split-off point for total
revenues of $50,000, or it can be processed further at a total cost of $16,000 and then sold for $68,000. Product Y:
А.
Should be sold at the split-off point, rather than processed further.
В.
Would increase the company's overall net operating income by $18,000 if processed further and then sold.
С.
Would increase the company's overall net operating income by $68,000 if processed further and then sold.
D.
Would increase the company's overall net operating income by $2,000 if processed further and then sold.
Е.
None of the above
Chapter 11 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 11 - Why do companies allocate costs? What are some of...Ch. 11 - What are the three methods of allocating service...Ch. 11 - What are the similarities and differences among...Ch. 11 - What criterion should be used to determine the...Ch. 11 - What is a limitation of the direct method of...Ch. 11 - What is a limitation of the step method of...Ch. 11 - Prob. 7RQCh. 11 - Why would a number of accountants express a...Ch. 11 - Prob. 9RQCh. 11 - What is the basic difference between the...
Ch. 11 - Prob. 11RQCh. 11 - If cost allocations arc arbitrary and potentially...Ch. 11 - Prob. 13CADQCh. 11 - Prob. 14CADQCh. 11 - Prob. 15CADQCh. 11 - Prob. 16CADQCh. 11 - Prob. 17CADQCh. 11 - Prob. 18CADQCh. 11 - What are some of the factors that a company needs...Ch. 11 - Prob. 20CADQCh. 11 - Prob. 21CADQCh. 11 - Prob. 22CADQCh. 11 - How is joint cost allocation like service...Ch. 11 - Prob. 24CADQCh. 11 - In what ways is joint cost allocation similar to...Ch. 11 - Why Are Costs Allocated?Ethical Issues You are the...Ch. 11 - Cost Allocation: Direct Method Caro Manufacturing...Ch. 11 - Allocating Service Department Costs First to...Ch. 11 - Cost Allwat ion: Direct Method University Printers...Ch. 11 - Prob. 30ECh. 11 - Cost Allocation: Step Method
Refer to the data for...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Cost Allocation: Reciprocal Method, Two Service...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Prob. 35ECh. 11 - Prob. 36ECh. 11 - Prob. 37ECh. 11 - Prob. 38ECh. 11 - Prob. 39ECh. 11 - Prob. 40ECh. 11 - Net Realizable Value Method: Multiple Choice
Oak...Ch. 11 - Sell or Process Further: Multiple Choice
Refer to...Ch. 11 - Net Realizable Value Method Euclid Corporation...Ch. 11 - Estimated Net Realizable Value Method Blasto,...Ch. 11 - Net Realizable Value Method to Solve for Unknowns...Ch. 11 - Net Realizable Value Method Bixel Components...Ch. 11 - Net Realizable Value Method with By-Products...Ch. 11 - Net Realizable Value Method Deming Sons...Ch. 11 - Physical Quantities Method
Refer to the facts in...Ch. 11 - Sell or Process Further
Refer to the facts in...Ch. 11 - Physical Quantities Method The following questions...Ch. 11 - Physical Quantities Method; Sell or Process...Ch. 11 - Physical Quantities Method with By-Product...Ch. 11 - Step Method with Three Service Departments Model,...Ch. 11 - Comparison of Allocation Methods BluStar Company...Ch. 11 - Solve for Unknowns: Direct Method Franks Foods has...Ch. 11 - Solve for Unknowns: Step Method RT Renovations is...Ch. 11 - Cost Allocation: Step Method with Analysis and...Ch. 11 - Prob. 59PCh. 11 - Prob. 60PCh. 11 - Direct, Step, and Reciprocal Methods:...Ch. 11 - Cost Allocation: Step and Reciprocal Methods...Ch. 11 - Allocate Service Department Costs: Direct and Step...Ch. 11 - Prob. 64PCh. 11 - Prob. 65PCh. 11 - Prob. 66PCh. 11 - Prob. 67PCh. 11 - Prob. 68PCh. 11 - Fletcher Fabrication, Inc., produces three...Ch. 11 - Findina Missing Data: Net Realizable Value Spartan...Ch. 11 - Finding Missing Data: Net Realizable Value Blaine,...Ch. 11 - Joint Costing in a Process Costing Context:...Ch. 11 - Find Maximum Input Price: Estimated Net Realizable...Ch. 11 - Effect of By-Product versus Joint Cost Accounting...Ch. 11 - Prob. 75PCh. 11 - Prob. 76P
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