AIR Co. manufactures one main product and two by-products, A and B. Data for April follows: Main Product By-product A B Total $3,500 $900 $75,000 $6,000 $1,100 $84,500 $13,500 Sales Cost of further $11,500 | processing Marketing Admin & $6,000 $750 $550 $7,300 Expenses Joint Cost Product based on sales allowed for A and B is 15% and 12% respectively. Compute for the total production cost of the main product. $37,500

AIR Co. manufactures one main product and two by-products, A and B. Data for April follows: Main Product By-product A B Total $3,500 $900 $75,000 $6,000 $1,100 $84,500 $13,500 Sales Cost of further $11,500 | processing Marketing Admin & $6,000 $750 $550 $7,300 Expenses Joint Cost Product based on sales allowed for A and B is 15% and 12% respectively. Compute for the total production cost of the main product. $37,500

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...

See similar textbooks

Similar questions

Laramie Industries produces two joint products, H and C. Prior to the split-off point, the company incurred costs of $66,000. Product H weighs 44 pounds and product C weighs 66 pounds. Product H sells for $250 per pound and product C sells for $295 per pound. Based on a physical measure of output, allocate joint costs to products H and C.
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.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Following are sales and other operating data for the three products made and sold by Legacy Corporation: Product A B C Total Sales P 600,000 P 300,000 P 200,000 P 1,100,000 Less: Manufacturing costs: Fixed 60,000 20,000 60,000 140,000 Variable 280,000 220,000 100,000 600,000 Selling and administrative expenses: Fixed 20,000 20,000 12,000 52,000 Variable 40,000 20,000 30,000 90,000 Total costs P 400,000 P 280,000 P 202,000 P 882,000 Net income P 200,000 P 20,000 P (2,000) P 218,000 Required: (Support your answers by showing your computations.) 1. In view of the net loss for Product C, Legacy’s management is considering dropping that product. All variable costs are direct costs and would be eliminated if Product C were dropped. Fixed costs are indirect costs; no fixed costs would be eliminated. Assume that the space used to produce Product C would be left idle. 2. Would you…
Joint products A, B and C are produced by JNT Corp. For the month just ended, these data are available: Using the market value method, the joint cost apportioned to each product will be: A. A – P22,652; B – P13,843; C – P13,335 B. A – P19,995; B – P19,014; C – P10,821 C. A – P22,440; B – P16,005; C – P11,385 D. A – P24,357; B – P14,885; C – P10,588
X Ltd. manufactures product A which yields two by-products B and C. In a period the amount spent up to the point of separation was OMR 20,600. Subsequent expenses were: Materials (in OMR) A: 300 B: 200 C: 150 Direct Wages (in OMR) A: 400 B: 300 C: 200 Overhead (in OMR) A: 300 B: 270 C: 280 Gross sales value of product A, B and C was RO 15,000, RO 10,000 and RO 5,000 respectively. It was estimated that the net profit as a percentage of sales in B and C would be 25% and 20% respectively. Ascertain the profit earned on A.
Whitman Company has just completed its fi rst year of operations. The company’s absorption costing income statement for the year appears below: Whiteman CompanyIncome Statement Sales (35000 units)Rs.875,000 Cost of goods sold @ of Rs.16 per unit560,000 Gross Profit315,000 Selling and Administrative expenses280,000 Net operating income35,000 The company’s selling and administrative expenses consist of Rs.210,000 per year in fixed expenses and Rs.2 per unit sold in variable expenses. The Rs.16 per unit product cost given above is computed as follows:Direct MaterialsRs.5 Direct Labour6 Variable manufacturing overhead1 Fixed manufacturing overhead (Rs.160,000 ÷ 40,000 units)4 Absorption costing unit product cost16 Required: Redo the company’s income statement in the contribution format using variable costing. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement…
Company manufactures three main products, A, B, and C from joint process. Additional data for May production activity follows: A B C unit produced 30,000 45,000 25,000 joint cost - 500,000 sales value @ split off 70,000 75,000 55,000 additional processing cost 12,000 15,000 15,000 sales value if processed further 95,000 97,000 100,000 what is the joint costs allocated to product C using adjusted sales value method?
FamaNyame Company has three divisions : Ess,Wae, and Zee. Division Ess' income statement shows the following for the year ended December 31 Sales-GHC1500000; Cost of goods sold - GHC1125000; Selling expenses- GHC125000, and administrative expenses- GHC 350000. Cost of goods sold is 80 per cent variable and 20 per cent fixed. Of the fixed costs, 50 per cent are avoidable if the division is closed. All the selling expenses relate to the division and would be eliminated if Division Ess were eliminated. Of the administrative costs, 85 per cent are applied from corporate expenses. If Division Ess were eliminated, FamaNyame's income would
Baguio Company manufactures one main product and two by-products Y and Z Data for April follows: By Product Main Product Y Z Total Sales 75,000 6,000 3,500 84,500 Costs of further processing 11,500 1,100 900 13,500 Marketing & Admin Expenses 6,000 750 550 7,300 Joint cost 37,500 Profit based on sales allowed for Y and Z is 15% and 12% respectively. Compute for the total production cost of the main product.
The following data refer to Quest Ltd for the current year:Sales Revenues $575 000Work in process inventory, 31December20 000Work in process inventory, 1 January 25 000Product promotion cost 30 000Rental of office space for salespersonnel20 000Cost of idle time: sales employees 20 000Income tax expense 60 000Purchase of raw materials 95 000Raw materials inventory, 31 December 17 500Raw material inventory. 1 January 25 000Direct labour 105 000Electricity: plant 25 000Depreciation plant and equipment 35 000Finished goods inventory, 31December30 000Finished goods inventory, 1 January 15 000Indirect material 5 000Indirect labour 7 500Production supervisor’s salary 40 000Required:a) Prepare the schedule of cost of goods manufactured for Quest Ltd.b) Prepare the schedule of cost of goods sold for Quest Ltd.c) Prepare an income statement for Quest Ltd for the current year.