Horngren's Cost Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (16th Edition)
16th Edition
ISBN: 9780134642468
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 16, Problem 16.21E
Joint-cost allocation, insurance settlement. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows:
| Parts | Pounds of Product | Wholesale Selling Price per Pound When Production Is Complete |
| Breasts | 100 | $0.55 |
| Wings | 20 | 0.20 |
| Thighs | 40 | 0.35 |
| Bones | 80 | 0.10 |
| Feathers | 10 | 0.05 |
Joint cost of production in July 2017 was $50.
A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken’s insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process.
- 1. Compute the cost of the special shipment destroyed using the following:
Required
- a. Sales value at splitoff method
- b. Physical-measure method (pounds of finished product)
- 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
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Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts.
Information pertaining to production in July 2020 follows:
(Click the icon to view the information.)
Joint cost of production in July 2020 was $50.
Data table
Parts
Breasts
Wings
Thighs
Bones
Feathers
Pounds of Wholesale Selling Price per Pound
Product When Production is Complete
100 $
20
40
80
10
Print
Done
0.55
0.20
0.35
0.10
0.05
X
A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire.
Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The
insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is
assumed to be at the end of the production process.
Read the requirements.
Requirements
1. Compute the cost of the special shipment destroyed using the following:
a. Sales value at splitoff method
b. Physical-measure method (pounds of finished product)
2. What…
The JYD Company processes apples into pies, spread, and dressing. During the second quarter of 2021, the joint cost of processing the apples was P750,000. There were no beginning inventories for the quarter. Production and sales value information for the quarter were as follows: Assume the use of the estimated net realizable value method.
Products Units Produced SV @ split-off Separable costs Final Selling Price Ending Units
Pies 20,000 P12/unit P20/unit P35/unit 7,000
Spread 50,000 15/unit 10/unit 28/unit 24,000
Dressing 25,000 9/unit 8/unit 20/unit 10,000
The allocated joint cost for product Pies at the end of the quarter is:
Group of answer choices
b. P450,000
a. P150,0000
d. Not given
c. P250,000
The JYD Company processes apples into pies, spread, and dressing. During the second quarter of 2021, the joint cost of processing the apples was P750,000. There were no beginning inventories for the quarter. Production and sales value information for the quarter were as follows: Assume the use of the estimated net realizable value method.
Products Units Produced SV @ split-off Separable costs Final Selling Price Ending Units
Pies 20,000 P12/unit P20/unit P35/unit 7,000
Spread 50,000 15/unit 10/unit 28/unit 24,000
Dressing 25,000 9/unit 8/unit 20/unit 10,000
The allocated joint cost for product Dressing at the end of the quarter is:
Group of answer choices
c. P150,000
a. P250,0000
d. Not given
b. P450,000
Chapter 16 Solutions
Horngren's Cost Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (16th Edition)
Ch. 16 - Give two examples of industries in which joint...Ch. 16 - What is a joint cost? What is a separable cost?Ch. 16 - Distinguish between a joint product and a...Ch. 16 - Why might the number of products in a joint-cost...Ch. 16 - Provide three reasons for allocating joint costs...Ch. 16 - Why does the sales value at splitoff method use...Ch. 16 - Prob. 16.7QCh. 16 - Distinguish between the sales value at splitoff...Ch. 16 - Give two limitations of the physical-measure...Ch. 16 - How might a company simplify its use of the NRV...
Ch. 16 - Why is the constant gross-margin percentage NRV...Ch. 16 - Managers must decide whether a product should be...Ch. 16 - Prob. 16.13QCh. 16 - Describe two major methods to account for...Ch. 16 - Why might managers seeking a monthly bonus based...Ch. 16 - Prob. 16.16MCQCh. 16 - Joint costs of 8,000 are incurred to process X and...Ch. 16 - Houston Corporation has two products, Astros and...Ch. 16 - Dallas Company produces joint products, TomL and...Ch. 16 - Earls Hurricane Lamp Oil Company produces both A-1...Ch. 16 - Joint-cost allocation, insurance settlement....Ch. 16 - Joint products and byproducts (continuation of...Ch. 16 - Net realizable value method. Sweeney Company is...Ch. 16 - Alternative joint-cost-allocation methods,...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Prob. 16.26ECh. 16 - Joint-cost allocation, sales value, physical...Ch. 16 - Joint-cost allocation: Sell immediately or process...Ch. 16 - Accounting for a main product and a byproduct....Ch. 16 - Joint costs and decision making. Jack Bibby is a...Ch. 16 - Joint costs and byproducts. (W. Crum adapted)...Ch. 16 - Methods of joint-cost allocation, ending...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Comparison of alternative joint-cost-allocation...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Joint-cost allocation. SW Flour Company buys 1...Ch. 16 - Further processing decision (continuation of...Ch. 16 - Joint-cost allocation with a byproduct. The...Ch. 16 - Byproduct-costing journal entries (continuation of...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Prob. 16.41PCh. 16 - Prob. 16.42PCh. 16 - Methods of joint-cost allocation, comprehensive....
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