1.
a.
To compute: Joint cost allocation as per sales value at split off method.
Given information:
Joint cost is $105,000.
Sales value of C in December is 45,000.
Sales value at split-off of A, B and D in December is $75,000, $62,500 and $67,500.
Separable cost of A, B and D is $240,000, $60,000 and $45,000
Revenue from A, B and D is $375,000, $150,000 and $75,000.
b.
To compute: Joint cost allocation as per physical measure method.
c.
To compute: Joint cost allocation as per NRV method.
2.
To compute: Effect on operating income due to different decisions about the further processing of products A, B or D.
Given information:
For A
Sales value of after process is computed to be $375,000.
Sales value of at split-off is computed as $75,000.
Separable cost is $240,000.
For B
Sales value of after process is computed to be $150,000
Sales value of at split-off is computed as $62,500.
Separable cost is $60,000.
For D
Sales value of after process is computed to be $75,000
Sales value of at split-off is computed as $67,500
Separable cost is $45,000.
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