Calamata Corporation processes a single material into three separate products A, B, and C. During September, the joint costs of processing were $300,000. Production and sales value information for the month were as follows: ProductUnits ProducedFinal Sales Value per Unit Separable Costs               A10,000$25$125,000               B15,00030250,000               C12,50024125,000 Determine the amount of joint cost allocated to each product if the constant gross-margin percentage NRV method is used

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Asked Dec 3, 2019
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Calamata Corporation processes a single material into three separate products A, B, and C. During September, the joint costs of processing were $300,000. Production and sales value information for the month were as follows:

 

Product

Units Produced

Final Sales Value per Unit

Separable Costs

               A

10,000

$25

$125,000

               B

15,000

30

250,000

               C

12,500

24

125,000

 

Determine the amount of joint cost allocated to each product if the constant gross-margin percentage NRV method is used

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Step 1: Compute the gross margin ...

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Amount (S) Amount (S) Particulars Sales Product A (10,000x$25) Product B (15,000x$30) Prodcut C (12,500x$24) Total sales (A) $ 250,000 $ 450,000 $300,000 S 1,000,000 Dedcut: Joint processing costs Separable cost Gross margin Gross margin percentage (B+A*100) $ 300,000 $ 800,000 S 200,000 S 500,000 20%

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