Requirement in 2nd image a. What amount of joint product cost would be allocate to each product?b. What is financial advantage (disadvantage) of processing of each product beyond the split-off point?c. What is the minimum amount the company should accept for each product if it is to be soldat the split-off, point? QUESTION 5MacGyver Company makes two products from a common input. Joint processing costs up to thesplit-off point total $45,500 a year. The company allocates these costs to the joint products onthe basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:Product XProduct YTotalSales value at split-off pointCosts of further processingSales value after further processing$30,000$24,200$47,800$20,000$18,500$58,300$50,000$42,700$106,100

Lets understand the basics. For allocating joint process cost, there are various methods are…

a. What amount of joint product cost would be allocate to each product? b. What is financial advantage (disadvantage) of processing of each product beyond the split- off point? c. What is the minimum amount the company should accept for each product if it is to be sold at the split-off point?

a. What amount of joint product cost would be allocate to each product? b. What is financial advantage (disadvantage) of processing of each product beyond the split- off point? c. What is the minimum amount the company should accept for each product if it is to be sold at the split-off point?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 10PA: Clarion Industries produces two joint products, Y and Z. Prior to the split-off point, the company...

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Refer to Cornerstone Exercise 7.10. (Round percentages to four significant digits and cost allocations to the nearest dollar.) Required: 1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze. 2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. 3. What if it cost 2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to these three products?
Computing joint costssales value at split-off and net realizable value methods D.L. Manufacturing Inc.s joint cost of producing 1,000 units of Product A, 500 units of Product B, and 500 units of Product C is 20,000. The unit sales values of the three products at the split-off point are Product A20, Product B200, and Product C160. Ending inventories include 100 units of Product A, 200 units of Product B, and 300 units of Product C. a. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their sales value at split off. b. Assume that Product C can be sold for 200 a unit if it is processed after split-off at a cost of 25 a unit. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their net realizable values.
Refer to Cornerstone Exercise 7.7. Assume that Orchard Fresh. Inc., uses the sales-value-at-split-off method of joint cost allocation and has provided the following information about the four grades of apples: Total joint cost is 18,000. Required: 1. Allocate the joint cost to the four grades of apples using the sales-value-at-split-off method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollar.) 2. What if the price at split-off of Grade B apples increased to 1.20 per pound? How would that affect the allocation of cost to Grade B apples? How would it affect the allocation of cost to the remaining grades?
Clarion Industries produces two joint products, Y and Z. Prior to the split-off point, the company incurred costs of $36,000. Product Y weighs 25 pounds and product Z weighs 75 pounds. Product Y sells for $150 per pound and product Z sells for $125 per pound. Based on a physical measure of output, allocate joint costs to products Y and Z.
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Their sales mix s reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $25,000 per year. What are total variable costs for Morris with their current product mix? Calculate the number of units of each product that will need to be sold in order for Morris to break even. What is their break-even point in sales dollars? Using an income statement format, prove that this is the break-even point.
Question 6. Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $100,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: product X, $50,000; product Y, $90,000; and product Z, $60,000. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product X Y . Z Required: Additional Processing Costs $35,000 $40,000 $12,000 Sales Value after Further Processing $80,000 $150,000 $75,000 Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.
Accounting Question 7 KLP Products Co. produces 2 joint products. Joint cost = $2,000. These products can be processed further after split – off point. Data for the current period are: Products Sales value At split - off Separable costs Final Sales value after further Processing D $1,000 $2,000 $3, 800 E $200 $600 $700 Required: Determine which product KLP Co. should sell at the split-off point and which product KLP Co. should process further.
Your Corporation produces products P, Q, and R from a joint production process. Each product may be sold at the split-off point or processed further. Joint production costs of $80,000 per year are allocated to the products based on the relative number of units produced. Which products should be processed further? P Q R Units produced 3,000 6,000 1,000 Selling price at split off $37,500 $46,500 $15,500 Cost to process further $10,000 $30,000 $5,000 Selling price after processing $50,000 $65,000 $25,000 a. P, Q and R b. P and Q c. Just P d. P and R e. Just Q
Problem 5 Ilang Ilang company manufactures Products A and B from a joint process which also yields a by-product. Ilang ilang accounts for the revenue from its by-product sales as a deduction from the cost of goods sold of its main products. Additional information follows: A B C Total Units produced 15,000 9,000 6,000 30,000 Joint Costs ? ? ? 264,000 Sales Value at Split off 290,000 150,000 10,000 450,000 Joint products are allocated using the relative sales value at split off approach What was the joint cost allocated to Product B?
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?
Exercise 13-7 (Algo) Sell or Process Further Decisions [LO13-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $390,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 28.00 per pound 14,600 pounds B $ 22.00 per pound 22,700 pounds C $ 34.00 per gallon 5,800 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Product Additional Processing Costs Selling Price A $ 91,990 $ 33.90 per pound B $ 133,305 $ 28.90 per pound C $ 62,660 $…
Icy Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs 22400 19600 42000 Sales value at split-off point 32,000 28,000 60,000 Costs of further processing 11600 25,300 36,900 Sales value after further processing 40,800 54,200 95,000 Required:a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? b) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? c) What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?d) What is the minimum amount the company…