Exercise 6 (Sell or Process Further) Patrick Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total P100,000 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 A, P50,000; product B, P90,000; and product C, P60,000. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. processing costs and the sales value after further processing for each product (on an annual basis) are shown below: The additional Sales Value P 80,000 150,000 75,000 Additional Product A. . B.. C... Processing Costs P35,000 40,000 12,000 Required: Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.

Exercise 6 (Sell or Process Further) Patrick Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total P100,000 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 A, P50,000; product B, P90,000; and product C, P60,000. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. processing costs and the sales value after further processing for each product (on an annual basis) are shown below: The additional Sales Value P 80,000 150,000 75,000 Additional Product A. . B.. C... Processing Costs P35,000 40,000 12,000 Required: Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 64P: Sell or Process Further, Basic Analysis Shenista Inc. produces four products (Alpha, Beta, Gamma,...

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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.
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
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.
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?
Candra GmbH obtains two products from a common input, Crude Oil. Joint processing costs up to the split-off point total $66,400 per year. Candra 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: Light Crude Oil Heavy Crude Oil Allocated joint processing costs $36,700 $29,700 Sales value at split-off point $43,306 $35,046 Costs of further processing $32,500 $35,300 Sales Value after further processing $75,475 $70,941 What is the net monetary advantage in dollars of processing Light Crude Oil beyond the split-off point into gasoline? Do not include a $. Enter a net disadvantage as a negative.
2. BZD Company manufactures products A and B from a joint process which also yields a by- product, X. BZD accounts for the revenues from its by-product sales as a deduction from the cost of goods sold of its main products. Additional information is as follows: A B X TOTAL Units produced 15,000 9,000 6,000 30,000 Joint costs ? ? ? P264,000 Sales value at split-off P290,000 P150,000 P 10,000 P450,000 Assuming that joint product costs are allocated using the relative sales value at split-off approach, what were the joint costs allocated to products A_____________________ B___________________ X__________________
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 $…
Cat Company produces products C, A, and T from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $75,000 per year are allocated to the products based on the relative number of units produced. Data for Cat's operations for the current year are as follows: Units Allocated Joint Sales Value Product Produced Production Cost At Split-off C 12,000 $23,000 $80,000 A 8,000 34,000 71,000 T 13,000 18,000 51,000 Product C can be processed beyond the split-off point for an additional cost of $29,000 and can then be sold for $103,000. Product A can be processed beyond the split-off point for an additional cost of $31,000 and can then be sold for $116,000. Product T can be processed beyond the split-off point for an additional cost of $17,000 and can then be sold for $65,000. Which products should be processed beyond the split-off point? (Show all calculations) What is a joint product cost? Explain in your own words.
Question 13 Earl’s Hurricane Lamp Oil Company produces both A-1 Fancy and B Grade Oil. There are approximately $18,000 in joint costs that Earl may allocate using the relative sales value at splitoff or the net realizable value approach. At splitoff, A-1 sells for $20,000 while B grade sells for $40,000. After an additional investment of $10,000 after splitoff, $3,000 for B grade and $7,000 for A-1, both the products sell for $50,000. What is the difference in allocated costs for the A-1 product assuming applications of the net realizable value and the sales value at splitoff approach? Group of answer choices A-1 Fancy has $2,600 less joint costs allocated to it under the net realizable value approach than the sales value at splitoff approach. A-1 Fancy has $2,600 more joint costs allocated to it under the net realizable value approach than the sales value at splitoff approach. A-1 Fancy has $1,500 less joint costs allocated to it under the net realizable value approach than…
Mitchener Corp. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $440,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. Each product may be sold at the split-off point or processed further. The additional processing costs and sales value after further processing for each product (on an annual basis) are: Product Sales Value at Split-Off Further Processing Costs Sales Value After Further Processing M $110,000 $ 50,000 $175,000 N 170,000 75,000 235,000 P 160,000 45,000 215,000 The "Further Processing Costs" consist of variable and avoidable fixed costs.INSTRUCTIONS Determine which product or products should be sold at the split-off point, and which product or products should be…
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?
Sell or Process Further Decisions Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 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: 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: Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should he sold at the split-off point and which product or products should be processed further?