Connect 1-Semester Access Card for Managerial Accounting: Creating Value in a Dynamic Business Environment (NEW!!)
11th Edition
ISBN: 9781259727788
Author: Hilton & Platt
Publisher: MCG
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Chapter 17, Problem 29P
Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces HTP–3, a chemical used in hot tubs and swimming pools; PST–4, a chemical used in pesticides; and RJ–5, a product that is sold to fertilizer manufacturers. Biondi uses the net-realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi’s operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $1,700,000 in the manufacture of HTP–3, PST–4, and RJ–5.
Required:
- 1. Determine Biondi Industries’ allocation of joint production costs for the month of October. (Carry calculation of relative proportions to four decimal places.)
- 2. Determine the dollar values of the finished-goods inventories for HTP–3, PST–4, and RJ–5 as of October 31. (Round the cost per gallon to the nearest cent.)
- 3. Suppose Biondi Industries has a new opportunity to sell PST–4 at the split-off point for $3.80 per gallon. Prepare an analysis showing whether the company should sell PST–4 at the split-off point or continue to process this product further.
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Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces
HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that
is sold to fertilizer manufacturers. Biondi uses the net-realizable-value method to allocate joint production costs. The ratio
of output quantities to input quantities of direct material used in the joint process remains consistent from month to month.
Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint
production costs of $2,550,000 in the manufacture of HTP-3, PST–4, and RJ-5.
Finished goods inventory in gallons (October 1)
October sales in gallons
October production in gallons
Additional processing costs
Final sales value per gallon
Problem 17-29 Part 1
HTP-3
PST-4
RJ-5
Joint Products
HTP-3
26,500…
Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by
Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in
pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net-realizable-value
method to allocate joint production costs. The ratio of output quantities to input quantities of direct
material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO
(first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi
incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ-5.
Finished goods inventory in gallons (October 1)
October sales in gallons
October production in gallons
Additional processing costs
Final sales value per gallon
Problem 17-29 Part 2
HTP-3
PST-4
RJ-5
Value of inventory
HTP-3…
Tesh, Inc., manufactures and sells two products: Product P9 and Product I9. Data concerning the expected production of each product and the expected total direct labour-hours (DLHs) required to produce that output appear below:
Expected Production
Direct Labour-Hours Per Unit
Total Direct Labour-Hours
Product P9
200
7.0
1,400
Product I9
400
6.0
2,400
Total direct labour-hours
3,800
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product P9
Product I9
Labour-related
DLHs
$71,136
1,400
2,400
Machine setups
setups
42,880
300
200
General factory
MHs
406,620
4,200
3,900
$520,636
The activity rate for the Machine setups activity cost pool under activity-based costing is closest to:
a. $1,041.27 per setup
b. $85.76 per setup
c. $214.40 per setup
d.…
Chapter 17 Solutions
Connect 1-Semester Access Card for Managerial Accounting: Creating Value in a Dynamic Business Environment (NEW!!)
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQCh. 17 - Why does dual cost allocation improve the...Ch. 17 - What potential behavioral problem can result when...Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Explain the difference between two-stage...Ch. 17 - Define the following terms: joint production...Ch. 17 - Prob. 10RQ
Ch. 17 - Describe the relative-sales-value method of joint...Ch. 17 - Define the term net realizable value, and explain...Ch. 17 - Are joint cost allocations useful? If they are,...Ch. 17 - For what purpose should the managerial accountant...Ch. 17 - Prob. 15ECh. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Tuscaloosa National Bank has two service...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Breakfasttime Cereal Company manufactures two...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Refer to the data given in Exercise 1720....Ch. 17 - Prob. 23ECh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Celestial Artistry Company is developing...Ch. 17 - Snake River Sawmill manufactures two lumber...Ch. 17 - Travelcraft Company manufactures a complete line...Ch. 17 - Biondi Industries is a manufacturer of chemicals...Ch. 17 - Berger Company manufactures products Delta, Kappa,...Ch. 17 - Prob. 31PCh. 17 - Lafayette Company manufactures two products out of...Ch. 17 - Refer to the data given in Problem 1726 for...Ch. 17 - Prob. 34PCh. 17 - Top Quality Fruit Company, based on Oahu, grows,...Ch. 17 - Prob. 36C
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