Answered: Joint Products; By-Products (Appendix)…

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...

See similar textbooks

Related questions

Question

Joint Products; By-Products (Appendix) The Marshall Company has a joint production process that produces two joint products and a by-product. The joint products are Ying and Yang, and
the by-product is Bit. Marshall accounts for the costs of its products using the net realizable value
method. The two joint products are processed beyond the split-off point, incurring separable processing costs. There is a $1,000 disposal cost for the by-product. A summary of a recent month’s activity
at Marshall is shown below:
Ying Yang Bit
Units sold 50,000 40,000 10,000
Units produced 50,000 40,000 10,000
Separable processing costs—variable $140,000 $42,000 $—
Separable processing costs—fixed $10,000 $8,000 $—
Sales price $6.00 $12.50 $1.60
Total joint costs for Marshall in the recent month are $265,000, of which $115,000 is a variable cost.
Required
1. Calculate the manufacturing cost per unit for each of the three products.
2. Calculate the total gross margin for each product

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Problem 7-48		The MARSHALL Company
		Production & Sales Data
Details		Ying	Yang	Bit	Total
Units sold		50,000	40,000	10,000	100,000
Units produced		50,000	40,000	10,000	100,000
Separable Processing Cost - var	$140,000.00	$42,000.00	$0.00	$182,000.00
Separable Processing Cost - fixed	$10,000.00	$8,000.00	$0.00	$18,000.00
Sales Price		$6.00	$12.50	$1.60
Total Joint Cost		$265,000.00
Byproduct Revenue	$16,000
Disposal cost of Byproduct	$1,000	$15,000
Adjusted Joint Cost to Allocate	$250,000

		c. Net Realizable Value
Joint Cost Allocation		Ying	Yang	Bit	Total
Expected Revenue		$300,000	$500,000	$16,000
Separable Processing Cost		$150,000	$50,000
Net Realizable Value		$150,000	$450,000		$600,000
Ratio		25%	75%
Allocated Joint Cost		$62,500	$187,500		$250,000
Separable Processing Cost		$150,000	$50,000	$0
Total Cost		$212,500	$237,500	$0
Cost per Unit (unit)		$4.25	$5.94	$1.50
		adjusted byproduct against COGS
Gross Margin Calculation		Ying	Yang	Bit	Total
Revenue		$300,000	$500,000		$800,000
Allocated Joint Cost		$62,500	$187,500		$250,000
Separable Processing Cost		$150,000	$50,000		$200,000
Cost of Goods Sold		$212,500	$237,500	$0	$450,000
Gross Profit		$87,500	$262,500	$0	$350,000
Gross Margin		29%	53%		43.75%

		byproduct shown in other income
Gross Margin Calculation		Ying	Yang	Bit	Total
Revenue		$300,000	$500,000		$800,000
Allocated Joint Cost		$66,250	$198,750		$265,000
Separable Processing Cost		$150,000	$50,000		$200,000
Cost of Goods Sold		$216,250	$248,750	$0	$465,000
Gross Profit		$83,750	$251,250	$0	$335,000
Gross Margin		28%	50%
					Other Income / Expense
				Revenue	$16,000
				Expense (Disposal)	$1,000

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Decision to Sell before or after additional processing

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions