Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Question
Chapter 19, Problem 3MAD
a.
To determine
Identify the flavors Company J should discontinue to further process after the split-off.
b.
To determine
Identify the flavor the Company J should keep apart from pure orange flavor.
c.
To determine
Compute the amount of joint production costs allocated to each product using the net realization value method.
d.
To determine
Identify how Company J could record the revenue from the sale of the by-product.
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Axiom Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each with different sales strategies, distribution
16
channels, and product offerings. Axiom is now considering the sale of a bundled product called Sync, consisting of one bottle of Him, a men's cologne, and one bottle of Her, a women's perfume, two of Axiom's very successful products. Axiom sells equal quantities of Him and Her perfume. For the most recent year, Axiom reported the following:
Product
Retail Price
Him
$40.00
Her
$60.00
Sync (Him and Her)
$90.00
1. Allocate revenue from the sale of each unit of Sync to Him and Her using the following:
The stand-alone revenue-allocation method based on the selling price of each product
The incremental revenue-allocation method, with Him ranked as the primary product
The incremental revenue-allocation method, with Her ranked as the primary product
The Shapley value method
2. Of the four methods in requirement 1,…
Spirit Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each with different sales strategies, distribution channels, and product
offerings. Spirit is now considering the sale of a bundled product called Sync, consisting of one bottle of Him, a men's cologne, and one bottle of Her, a women's perfume, two of Spirit's very
successful products. Spirit sells equal quantities of Him and Her perfume. For the most recent year, Spirit reported the following:
(Click the icon to view the sales information.)
Read the requirements.
Requirement 1a. Allocate revenue from the sale of each unit of Sync to Him and Her using the following:
a. The stand-alone revenue-allocation method based on selling price of each product. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.)
Stand-alone
Him
Her
Spirit Company blends and sells designer fragrances. It has a Men's Fragrances Division and a Women's Fragrances Division, each
with different sales strategies, distribution channels, and product offerings. Spirit is now considering the sale of a bundled product
called Sync, consisting of one bottle of Him, a men's cologne, and one bottle of Her, a women's perfume, two of Spirit's very
successful products. Spirit sells equal quantities of Him and Her perfume. For the most recent year, Spirit reported the following:
(Click the icon to view the sales information.)
Read the requirements.
Data table
$ 80.00
LE
$
Sync (Him and Her) $ 130.00
Product
Him
Her
Retail Price
120.00
Chapter 19 Solutions
Financial And Managerial Accounting
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