Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost= $90,000). Six thousand pounds of Nuts can be sold at split-off for $25 per pound; fifteen thousand pounds of Bolts can be sold at split-off for $20 per pound. For product costing purposes Cheyenne allocates joint costs using the relative sales value method. The amount of joint cost allocated to Bolts would be: Multiple Choice $90,000. $30,000.

Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost= $90,000). Six thousand pounds of Nuts can be sold at split-off for $25 per pound; fifteen thousand pounds of Bolts can be sold at split-off for $20 per pound. For product costing purposes Cheyenne allocates joint costs using the relative sales value method. The amount of joint cost allocated to Bolts would be: Multiple Choice $90,000. $30,000.

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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Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?
LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of Product Y, and 1,000 units of Product Z is $50,000. The unit sales values of the three products at the split-off point are Product X–$30, Product Y–$100, and Product Z–$90. Ending inventories include 200 units of Product X, 300 units of Product Y, and 100 units of Product Z. 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 values at split-off. Assume that Product Z can be sold for $120 a unit if it is processed after split-off at a cost of $10 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.
Man OFort Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing 29,000 per batch and producing 2,000 standard door handles and 1,000 curved door handles at the split-off point. Both door handles undergo additional production processes after the split-off point, but could be sold at that point: the standard style for 4 per door handle and the curved style for 2 per door handle. Determine the amount of joint production costs allocated to each style of door handle using the market value at split-off method.
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