Exercise 8-8. JOINT COST ALLOCATION & BYPRODUCT ALLOCATION - MARKET VALUE МЕТHOD The BAR Company manufactures joint products A and R as well as byproduct B. Cumulative cost data for the period show P204,000 representing 20,000 completed units processed through the Refining Department at an average cost of P10.20. Costs are assigned to A and R by the market value method which considers further processing costs in subsequent operations. To determine the cost allocation to B, the market value (reversal cost) method is used. Additional data: В 2,000 R 10,000 8,000 Quantity processed Sales price per unit Further processing cost per unit Selling and general expenses per unit Operating profit per unit REQUIRED: Cumulative cost allocated to B, A, and R P 5.00 P20.00 P25.00 1.00 5.00 7.00 1.00 1.00

Exercise 8-8. JOINT COST ALLOCATION & BYPRODUCT ALLOCATION - MARKET VALUE МЕТHOD The BAR Company manufactures joint products A and R as well as byproduct B. Cumulative cost data for the period show P204,000 representing 20,000 completed units processed through the Refining Department at an average cost of P10.20. Costs are assigned to A and R by the market value method which considers further processing costs in subsequent operations. To determine the cost allocation to B, the market value (reversal cost) method is used. Additional data: В 2,000 R 10,000 8,000 Quantity processed Sales price per unit Further processing cost per unit Selling and general expenses per unit Operating profit per unit REQUIRED: Cumulative cost allocated to B, A, and R P 5.00 P20.00 P25.00 1.00 5.00 7.00 1.00 1.00

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Description: Exercise 8-8. JOINT COST ALLOCATION & BYPRODUCT ALLOCATION - MARKET VALUEМЕТHODThe BAR Company manufactures joint products A and R as well as byproduct B. Cumulative costdata for the period show P204,000 representing 20,000 completed units processed

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...

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Joint cost allocation McKenzies Soap Sensations, Inc., produces hand soaps with three different scents: morning glory, snowflake sparkle, and sea breeze. The soap is produced through a joint production process thatcosts 30,000 per batch. Each batch produces 14,800 bottles of morning glory hand soap, 12,000bottles of snowflake sparkle hand soap, and 10,000 bottles of sea breeze hand soap at the split-offpoint. Each product is processed further after the split-off point, but the market value of a bottle ofany of the flavors at this point is estimated to be 1.25 per bottle. The additional processing costsof morning glory, snowflake sparkle, and sea breeze hand soap are 10.50, 0.55, and 0.60 perbottle, respectively. Morning glory, snowflake sparkle, and sea breeze hand soap are then sold for2.00, 2.20, and 2.40 per bottle, respectively. Instructions 1. Using the net realizable value method, allocate the joint costs of production to each product. 2. Explain why McKenzies Soap Sensations, Inc., always chooses to process each varietyof hand soap beyond the split-off point. 3. If demand for all products was the same, which product should McKenzies Soap Sensations, Inc., produce in the highest quantity?
The Converting Department of Tender Soft Tissue Company uses the weighted average method and had 1,900 units in work in process that were 60% complete at the beginning of the period. During the period, 15,800 units were completed and transferred to the Packing Department. There were 1,200 units in process that were 30% complete at the end of the period. a. Determine the number of whole units to be accounted for and to be assigned costs for the period. b. Determine the number of equivalent units of production for the period. Assume that direct materials are placed in process during production.
Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. (Round all allocated costs to the nearest dollar.) 3. What if the allocation ratios in Requirement 1 were rounded to six significant digits rather than four? How would that affect any rounding error in the allocation of costs?
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. a. Direct material cost per unit. b. Fees for using a patent of $500,000 plus $0.25 for each unit produced. c. Salary of quality control supervisor. d. Straight-line depreciation per unit on factory equipment. e. Total direct materials cost.
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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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