Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 19, Problem 4PB
Joint cost allocation
Rosie’s Roses produces three colors of roses: red, white, and peach. The roses are produced jointly in the same garden, and aggregately cost a total of $110 per harvest. One harvest produces 80 red roses, 70 white roses, and 50 peach roses. Rosie also noted that the peach roses require a fertilizer that is m ice as expensive as the fertilizer required by the white and red roses. However, due to the structure of the shared garden space, the more expensive fertilizer is used for all flower types in a joint production process.
Instructions
- 1. Using the physical units method, allocate the joint costs of production to each product.
- 2. Using the weighted average method, allocate the joint costs of production to each product.
- 3. Is the cost of the type of fertilizer required by each type of rose a good weight factor?
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Rosie’s Roses produces three colors of roses: red, white, and peach. The roses are produced jointly in the same garden, and aggregate cost a total of $110 per harvest. One harvest produces 80 red roses, 70 white roses, and 50 peach roses. Rosie also noted that the peach roses require a fertilizer that is twice as expensive as the fertilizer required by the white and red roses. However, due to the structure of the shared garden space, the more expensive fertilizer is used for all flower types in a joint production process.
1. Using the physical units method, allocate the joint costs of production to each product.
2. Using the weighted average method, allocate the joint costs of production to each product.
3. Is the cost of the type of fertilizer required by each type of rose a good weight factor?
Allocate the joint costs to Seduction and Romance under the constant gross-margin percentage NRV method.
Joint Cost Allocation—Physical Units Method
Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch.
Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places.
Chapter 19 Solutions
Financial And Managerial Accounting
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