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
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 36C
1.
To determine
Draw a diagram that portrays the joint production process of Company V.
2.
To determine
Allocate the joint production costs of company V for the month of May under the following methods:
- a. The physical-units method.
- b. The relative-sales-value method.
- c. The net-realizable-value method.
3.
To determine
Describe whether Kryptite should be processed further into Omega and if so state the reason.
4.
To determine
Describe whether the joint cost allocation from requirement (2) is used or not in requirement (3) and explain the reason behind it.
5.
To determine
Prepare an excel sheet for the given detail in requirement (2) and (3), assume that the joint cost is $245,000, and the sales price of Omega is $125 per pound.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
GETSNYA manufactures two industrial products in a joint process. In January, 10,000 gallons of input costing P120,000 were processed at a cost of P300,000. The joint process resulted in 8,000 pounds of Product One and 2,000 pounds of Product Two. Product One sells at P50 per pound and Product Two sells for P100 per pound. Management generally processes each of these chemicals further to produce more refined chemical products. Product One is processed separately at a cost of P10 per pound, the resulting product sells for P70 per pound. Product Two is processed separately at a cost of P30 per pound, the resulting product sells for P190 per pound.Assuming that management is considering an opportunity to process Product Two into a new product. The separable processing will cost P80 per pound. Packaging costs for the new product is projected to be P12 per pound, and anticipated sales price is P260 per pound. Should Product Two be processed further into a new product?
a. Yes, because…
Cranbrook Chemical Ltd. manufactures two industrial compounds. In the month of May, 15,000 litres of direct
material costing $160,000 were processed at a cost of $400,000. The joint process yielded 16,000 containers of a
compound known as Jarlon and 4,000 containers of a compound known as Kharton. The respective selling prices of
Jarlon and Kharton are $38 and $58. Both products may be processed further. Jarlon may be processed into Jaxton at
an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional
cost of $32 per jar of the final product. The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and
Kraxton respectively. The selling price of Jaxton is $48 per jar. The selling price of Kraxton is $102 per jar.
Using the NRV method, the amount of joint costs allocated to Jaxton is:
$111,312.
$389,592.
$170,408.
$121,720.
$278,280.
The Lakers Corporation uses a joint manufacturing process that produces three
products. The process produced1,000 units of Product A, 500 units of Product B, and
500 units of Product C in January. The joint cost incurred in this process is $200,000.
All three products can be sold at the split-off point; $20 for Product A, $200 for Product
B, and $160 for Product C. Alternatively, the products can be processed further and
sold at a final stage. The following information relates to processing these products
further:
Final Selling
Price
$ 40
300
180
Separable
Costs
$15,000
30,000
2,000
Product
B'
C
At the inventory at the end of January includes 100 units of Product A, 300 units of
Product B, and 200 units of Product C.
Required:
a. Calculate the value of ending inventory of the three products based on (1) the sales
value at split-off and (2) the physical measures approach using units.
b. Assume that product A is a byproduct and joint costs are allocated based on number
of units. Lakers…
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
Knowledge Booster
Similar questions
- Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?arrow_forwardPacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this 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 sell overs at split-off or process them further? Show supporting computations.arrow_forwardLamont Industries produces chemicals for the swimming pool industry. In one joint process, 10,000 gallons of GSX are processed into 7,000 gallons of xenolite and 3,000 gallons of banolide. The cost of the joint process, including the GSX, is $19,000. The firm allocates $13,300 of the joint cost to the xenoliteand $5,700 of the cost to the banolide. The 3,000 gallons of banolide can be sold at the split-off point for $2,500, or be processed further into a product called kitrocide. The sales value of 3,000 gallons of kitrocide is $10,000, and the additional processing cost is $8,100. Required: Lamont’s president has asked your consulting firm to make a recommendation as to whether the banolide should be sold at the split-off point or processed further. Write a letter providing an analysis and a recommendation.arrow_forward
- Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 26,000 pounds of Alpha at a total cost of $102,000. The output of the process consisted of 30,150 units of product X, 36,850 units of product Y, and 7,400 units of by-product Z. By-product Z can be sold for $10,800. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y?arrow_forwardLawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 23,000 pounds of Alpha at a total cost of $99,000. The output of the process consisted of 28,800 units of product X, 35,200 units of product Y, and 7,100 units of by-product Z. By-product Z can be sold for $12,000. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y? Product X Product Y Joint Costsarrow_forwardPharoah Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $181,000 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Spock Uhura Sulu Sales Value at Split-Off Point $209,200 300,900 455,600 Allocated Joint Costs Incremental profit (loss) $ $39,600 60,700 80,700 Cost to Process Further Spock $109,700 85,000 250,700 Sales Value of Processed Product the cold as is $299,000 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 401,000 799,400 Uhura processed further $ Suluarrow_forward
- The RieppelSpirits Company produces two products—methanol (wood alcohol) and turpentine—by a joint process. Joint costs amount to $120,000 per batch of output. Each batch totals 10,000 gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $3 per gallon, and turpentine, $2 per gallon. Methanol sells for $21 per gallon. Turpentine sells for $14 per gallon. Read the requirements1. Requirement 1. How much of the joint costs per batch will be allocated to methanol and to turpentine, assuming that joint costs are allocated based on the number of gallons at splitoff point? (Round the weights to five decimal places.) Methanol Turpentine Total Physical measure of total production Weighting Joint costs allocated Requirement 2. If joint costs are allocated on an NRV basis, how much of the joint…arrow_forwardArkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of product A and 1,600 gallons of product B to the split-off point costs $5,900. The sales value at split-off is $2.00 per gallon for product A and $25.00 per gallon for product B. Product 8 requires additional separable processing beyond the split-off point at a cost of $2.50 per gallon before it can be sold at a price of $34 per gallon. Required: What is the company's cost to produce 1,600 gallons of product B? Product costarrow_forwardKirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $178,600 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Sales Value atSplit-Off Point AllocatedJoint Costs Cost to ProcessFurther Sales Value ofProcessed Product Spock $209,500 $39,200 $110,100 $300,900 Uhura 299,900 59,100 85,100 400,900 Sulu 454,000 80,300 249,500 800,700 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Spock Uhura Sulu…arrow_forward
- Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $178,800 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Spock Uhura Sulu Sales Value at Split-Off Point $211,000 299,200 455,600 Allocated Joint Costs Incremental profit (loss) $ $39,700 59,800 79,300 Cost to Process Further $110,800 Spock 85,200 250,000 Sales Value of Processed Product $300,100 400,200 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 800,800 Uhura Suluarrow_forwardVictoria Mills manufactures three products: A, B, and C in a joint process. For every ten kilos of materials input, the output is five kilos of A, three kilos of B, and two kilos of C, respectively. During the month, 50,000 kilos of raw materials costing P1,200,000 were process and completed with a joint conversion costs of P2,000,000. Conversion costs are allocated to the products salable, further processing which does not require additional raw materials was done at the following costs: A, P300,000; B, P200,000; C, P300,000. The unit selling price are: A, P100; B, P120 and C, P150. 15. The unit cost of product A is a. P80 b. P100 c. P253.20 d. P71.20arrow_forwardKirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $179,400 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Sales Value atSplit-Off Point AllocatedJoint Costs Cost to ProcessFurther Sales Value ofProcessed Product Spock $209,700 $40,000 $109,600 $300,900 Uhura 300,000 60,200 84,900 399,900 Sulu 455,500 79,200 249,500 800,500 Determine the incremental profit or loss that each of the three joint products. Spock Uhura Sulu Incremental profit (loss) $ $ $ Indicate whether each of the three joint products should be sold as…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning