McGraw Company manufactures three products from a joint production process: alphas, betas, and gammas. The joint costs for one batch are as follows: Direct materials $68,800 Direct labor 28,000 Overhead 28,200 At the split-off point, a batch yields 12,500 alphas, 17,500 betas, and 20,000 gammas. All products are sold at the split-off point: alpha sells for $20 per unit; beta sells for $50 per unit, and gamma sells for $18 per unit. Required 1. Allocate the joint costs using the physical units method. 2. Allocate the joint costs using the sales-value-at-split-off method.
McGraw Company manufactures three products from a joint production process: alphas, betas, and gammas. The joint costs for one batch are as follows: Direct materials $68,800 Direct labor 28,000 Overhead 28,200 At the split-off point, a batch yields 12,500 alphas, 17,500 betas, and 20,000 gammas. All products are sold at the split-off point: alpha sells for $20 per unit; beta sells for $50 per unit, and gamma sells for $18 per unit. Required 1. Allocate the joint costs using the physical units method. 2. Allocate the joint costs using the sales-value-at-split-off method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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McGraw Company manufactures three products from a joint production process: alphas, betas, and gammas. The joint costs for one batch are as follows:
Direct materials $68,800
Direct labor 28,000
Overhead 28,200
At the split-off point, a batch yields 12,500 alphas, 17,500 betas, and 20,000 gammas. All products are sold at the split-off point: alpha sells for $20 per unit; beta sells for $50 per unit, and gamma sells for $18 per unit.
Required
1. Allocate the joint costs using the physical units method.
2. Allocate the joint costs using the sales-value-at-split-off method.
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