20. Kenneth Company manufactures product X and Y from a joint process that also yields a by-product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional infomation is asfollows:PRDUTotalYUnits producedJoint costs20,00020,00010,00050,000??P262,000P30,00010,000Sales value at split-offJoint cost are allocated using the sales value at split-off method. The joint costs allocated to product X150,000460,000werea. 75,000b. 100,000c. 150,000d. 168,000

Joint costs arise when an organization produces multiple products. It can be allocated on the basis…

20. Kenneth Company manufactures product X and Y from a joint process that also yields a by- product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional infomation is as follows: PR DU Total Y Units produced Joint costs Sales value at split-off Joint cost are allocated using the sales value at split-off method. The joint costs allocated to product X 20,000 20,000 10,000 50,000 P262,000 ? P30,000 150,000 10,000 460,000 were a. 75,000 b. 100,000 c. 150,000 d. 168,000

20. Kenneth Company manufactures product X and Y from a joint process that also yields a by- product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional infomation is as follows: PR DU Total Y Units produced Joint costs Sales value at split-off Joint cost are allocated using the sales value at split-off method. The joint costs allocated to product X 20,000 20,000 10,000 50,000 P262,000 ? P30,000 150,000 10,000 460,000 were a. 75,000 b. 100,000 c. 150,000 d. 168,000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 14.18E

See similar textbooks

Similar questions

Sell or Process Further, Basic Analysis Shenista Inc. produces four products (Alpha, Beta, Gamma, and Delta) from a common input. The joint costs for a typical quarter follow: The revenues from each product are as follows: Alpha, 100,000; Beta, 93,000; Gamma, 30,000; and Delta, 40,000. Management is considering processing Delta beyond the split-off point, which would increase the sales value of Delta to 75,000. However, to process Delta further means that the company must rent some special equipment that costs 15,400 per quarter. Additional materials and labor also needed will cost 8,500 per quarter. Required: 1. What is the operating profit earned by the four products for one quarter? 2. CONCEPTUAL CONNECTION Should the division process Delta further or sell it at split-off? What is the effect of the decision on quarterly operating profit?
Bonanza Co. manufactures products X and Y from a joint process that also yields a by-product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional information is as follows: PRODUCTS X Y Z TOTAL Units produced 32,000 32,000 16,000 80,000 Joint costs ? ? ? $ 322,000 Sales value at split-off $ 480,000 $ 240,000 $ 16,000 $ 736,000 Joint costs were allocated using the net realizable value method at the split-off point. The joint costs allocated to product X were Multiple Choice $120,000. $136,800. $240,000. $204,000.
Inseparable Company produces products X and Y in a joint manufacturing process. The joint cost allocated to Product X is P15 and to Product Y is P10. At the point of splitting-off in the manufacturing process, Product Y can be sold for P15. The company is considering to incur additional processing cost of P4 for Product Y, after which the product can be sold for P22. Should Product Y be processed further or just sold at split-off point? Support your answer wirh computations and text.
2. ABC Company uses a joint process to produce products A, B, and C. The joint production costs for 201Awere 500,000 and were allocated using relative sales value at the split-off point method.Each product may be sold at its split-off point or processed further. Additional processing costs are entirelyvariable.ProductsSales Value atSplit-offAdditionalProcessingCostsFinal SalesValueA P300,000 P130,000 420,000B 120,000 100,000 230,000C 250,000 140,000 400,000P670,000 P370,000 P1,050,000 a. To maximize profit, which product/s should be sold at split-off point and be processed further,respectively?b. If the alternative were to sell at split-off point or to process further all products, which alternativewould be recommended?
A company manufactures products X and Y using a joint process. The joint processing costs are P10,000. Products X and Y can be sold at split-off for P12,000 and P8,000 respectively. After split-off, product X is processed further at a cost of P5,000 and sold for P21,000 whereas product Y is sold without further processing. If the company uses the net realizable value method for allocating joint costs, the joint cost allocated to X is
U CO. has two products, product X and product B, emerge from a joint process. Product X has been allocated P30,800 of the total joint costs of P44,000. A total of 2,000 units of product X are produced from the joint process. Product X can be sold at the split-off point for P13 per unit, or it can be processed further for an additional total cost of P14,000 and then sold for P15 per unit. If product X I not processed further and sold, what would be the effect (increase/decrease) on the overall profit of the company compared with sale at split-off point?
Assume a company has two products—A and B—that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $14,800 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A? Multiple Choice $(3,200) $3,200 $(22,000) $22,000
ABC Company uses a joint process to produce products A, B, and C. The joint production costs for 201A were 500,000 and were allocated using relative sales value at the split-off point Each product may be sold at its split-off point or processed further. Additional processing costs are entirely variable. Products Sales Value at Split-off Additional Processing Costs Final Sales Value A P300,000 P130,000 420,000 B 120,000 100,000 230,000 C 250,000 140,000 400,000 P670,000 P370,000 P1,050,000 To maximize profit, which product/s should be sold at split-off point and be processed further, respectively? If the alternative were to sell at split-off point or to process further all products, which alternative would be recommended?
Two products, QI and VH, emerge from a joint process. Product QI has been allocated $31,300 of the total joint costs of $52,000. A total of 2,600 units of product QI are produced from the joint process. Product QI can be sold at the split-off point for $15 per unit, or it can be processed further for an additional total cost of $10,600 and then sold for $17 per unit. If product QI is processed further and sold, what would be the profit (loss) for the company compared with sale in its unprocessed form directly after the split-off point? Multiple Choice ($39,100) $(5,400) ($25,900) $33,600
Backer Company manufactures products Katran and Klare from a joint process. Product Katran has been allocated P7,500 of total joint costs of P30,000 for the 1,500 units produced. Katran can be sold at the splitoff point for P4 per unit, or it can be processed further with additional costs of P2,000 and sold for P7 per unit. If Katran is processed further and sold, the result would be A. a gain of P1,000 from further processing. B. a loss of P2,500 from further processing C. an overall loss of P1,500 D. a gain of P2,500 from further processing
Two products, QI and VH, emerge from a joint process. Product QI has been allocated $24,300 of the total joint costs of $45,000. A total of 3,100 units of product QI are produced from the joint process. Product QI can be sold at the split-off point for $15 per unit, or it can be processed further for an additional total cost of $11,100 and then sold for $17 per unit. If product QI is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point?
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $13. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost-based transfer price? Variable cost per unit $6.31 Fixed cost per unit 1.36 Division B sales price of Component X 14.5