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Example with Byproduct and Separable Costs: Lond Co. produces joint products Jana and Reta, together with byproduct Bynd. Jana is sold at split-off, whereas Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 20x1 were as follows: Jana Reta Bynd Total Joint costs Variable $88,000 Fixed 148,000 Separable costs Variable $120,00 $3,000 123,000 Fixed 90,000 2,000 92,000 Production in Pounds 50,000 40,000 10,000 100,000 Sales price per pound $4.00 $7.50 $1.10 There were no beginning or ending inventories. No materials are spoiled in production. Variable costs change in direct proportion to production volume. The net realizable value of the byproduct (Bynd) is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product. Required: Allocate joint costs using: 1. Unit of measure method. 2. Net realizable value method. 3. Constant gross margin percent method.

Example with Byproduct and Separable Costs: Lond Co. produces joint products Jana and Reta, together with byproduct Bynd. Jana is sold at split-off, whereas Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 20x1 were as follows: Jana Reta Bynd Total Joint costs Variable $88,000 Fixed 148,000 Separable costs Variable $120,00 $3,000 123,000 Fixed 90,000 2,000 92,000 Production in Pounds 50,000 40,000 10,000 100,000 Sales price per pound $4.00 $7.50 $1.10 There were no beginning or ending inventories. No materials are spoiled in production. Variable costs change in direct proportion to production volume. The net realizable value of the byproduct (Bynd) is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product. Required: Allocate joint costs using: 1. Unit of measure method. 2. Net realizable value method. 3. Constant gross margin percent method.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...
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Example with Byproduct and Separable Costs: Lond Co. produces joint products Jana and Reta, together with byproduct Bynd. Jana is sold at split-off, whereas Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 20x1 were as follows: Jana Reta Bynd Total Joint costs Variable $88,000 Fixed 148,000 Separable costs Variable $120,00 $3,000 123,000 Fixed 90,000 2,000 92,000 Production in Pounds 50,000 40,000 10,000 100,000 Sales price per pound $4.00 $7.50 $1.10 There were no beginning or ending inventories. No materials are spoiled in production. Variable costs change in direct proportion to production volume. The net realizable value of the byproduct (Bynd) is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product. Required: Allocate joint costs using: 1. Unit of measure method. 2. Net realizable value method. 3. Constant gross margin percent method.
Transcribed Image Text:Example with Byproduct and Separable Costs: Lond Co. produces joint products Jana and Reta, together with byproduct Bynd. Jana is sold at split-off, whereas Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 20x1 were as follows: Jana Reta Bynd Total Joint costs Variable $88,000 Fixed 148,000 Separable costs Variable $120,00 $3,000 123,000 Fixed 90,000 2,000 92,000 Production in Pounds 50,000 40,000 10,000 100,000 Sales price per pound $4.00 $7.50 $1.10 There were no beginning or ending inventories. No materials are spoiled in production. Variable costs change in direct proportion to production volume. The net realizable value of the byproduct (Bynd) is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product. Required: Allocate joint costs using: 1. Unit of measure method. 2. Net realizable value method. 3. Constant gross margin percent method.
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