Answered: How much of the joint cost should be… | bartleby

Accounting (Text Only)

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Process Cost Systems

Section: Chapter Questions

Problem 20.20EX: Process costing for a service company Madison Electric Company uses a fossil fuel (coal) plant for...

See similar textbooks

Related questions

Question

QS 22-18C Joint cost allocation LO C3

A company purchases a 10,020-square-foot commercial building for $325,000 and spends an additional $50,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 3,340 square feet, will be rented for $1.00 per square foot. Unit B contains 6,680 square feet and will be rented for $0.75 per square foot.

How much of the joint cost should be assigned to Unit B using the value basis of allocation?

QS 22-18C Joint cost allocation LO C3
A company purchases a 10,020-square-foot commercial building for $325,000 and spends an additional $50,000 to divide the space
into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 3,340 square
feet, will be rented for $1.00 per square foot. Unit B contains 6,680 square feet and will be rented for $0.75 per square foot.
How much of the joint cost should be assigned to Unit B using the value basis of allocation?
Percent of Market Value
Apportioned
Cost
Market Value
Joint Cost
Numerator
Denominator % of Mkt Value
Unit A
Unit B
Totals
0.00%

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Similar questions

Product costing and decision analysis for a service company Blue Star Airline provides passenger airline service, using small jets. The airline connects four major cities: Charlotte, Pittsburgh, Detroit, and San Francisco. The company expects to fly 170,000 miles during a month. The following costs are budgeted for a month: Fuel 2,120,000 Ground personnel 788,500 Crew salaries 850,000 Depreciation 430,000 Total costs 4,188,500 Blue Star management wishes to assign these costs to individual flights in order to gauge the profitability of its service offerings. The following activity bases were identified with the budgeted costs: Airline Cost Activity Base Fuel, crew, and depreciation costs Number of miles flown Ground personnel Number of arrivals and departures at an airport The size of the companys ground operation in each city is determined by the size of the workforce. The following data are available from corporate records for each terminal operation: Terminal City Ground Personnel Cost Number of Arrivals/Departures Charlotte 256,000 320 Pittsburgh 97,500 130 Detroit 129,000 150 San Francisco 306,000 340 Total 788,500 940 Three recent representative flights have been selected for the profitability study. Their characteristics are as follows: Description Miles Flown Number of Passengers Ticket Price per Passenger Flight 101 Charlotte to San Francisco 2,000 80 695,00 Flight 102 Detroit to Charlotte 800 50 441,50 Flight 103 Charlotte to Pittsburgh 400 20 382,00 Instructions 1. Determine the fuel, crew, and depreciation cost per mile flown. 2. Determine the cost per arrival or departure by terminal city. 3. Use the information in (1) and (2) to construct a profitability report for the three flights. Each flight has a single arrival and departure to its origin and destination city pairs.
Process costing for a service company Madison Electric Company uses a fossil fuel (coal) plant for generating electricity. the facility can generate 900 megawatts (million watts) per hour. The plant operates 600 hours during March. Electricity is used as it is generated; thus, there are no inventories at the beginning or end of the period. The March conversion and fuel costs are as follows: Conversion costs 40,500,000 Fuel 10,800,000 Total 51,300,000 Madison also has a wind farm that can generate 100 megawatts per hour. the wind farm receives sufficient wind to run 300 hours for March. The March conversion costs for the wind farm (mostly depreciation) are as follows: Conversion costs 2,700,000 a. Determine the cost per megawatt hour (MWh) for the fossil fuel plant and the wind farm to identify the lowest cost facility in March, b. Why are equivalent units of production not needed in determining the cost per megawatt hour (MWh) for generating electricity? c. What advantage does the fossil fuel plant have over the wind farm?

Recommended textbooks for you

Accounting (Text Only)

Accounting (Text Only)

Accounting

ISBN:

9781285743615

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial & Managerial Accounting

Financial & Managerial Accounting

Accounting

ISBN:

9781337119207

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Accounting (Text Only)

Accounting (Text Only)

Accounting

ISBN:

9781285743615

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial & Managerial Accounting

Financial & Managerial Accounting

Accounting

ISBN:

9781337119207

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS