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Northern Company processes 100 gallons of raw materials into 75 gallons of product GS-50 and 25 gallons of GS-80. GS-50 is further processed into 50 gallons of product GS-505 at a cost of $7,700, and GS-80 is processed into 50 gallons of product GS-805 at a cost of $6,425. The production process starts at point 1. A total of $20,000 in joint manufacturing costs are incurred in reaching point 2. Point 2 is the split-off point of the process that manufactures GS-50 and GS-80. At this point, GS-50 can be sold for $800 a gallon, and GS-80 can be sold for $160 a gallon. The process is completed at point 3-products GS- 505 and GS-805 have a sales price of $600 a gallon and $240 a gallon, respectively. Required: Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales value at split-off, and (3) net realizable value. (Do not round Intermediate calculations. Round your final answers to nearest whole dollar amount.) (1) Physical measure (2) Sales value at split-off (3) Net realizable value GS-50 cost per unit GS-505 cost per unit GS-80 cost per unit GS-805 cost per unit Total cost per unit Total cost per unit

Northern Company processes 100 gallons of raw materials into 75 gallons of product GS-50 and 25 gallons of GS-80. GS-50 is further processed into 50 gallons of product GS-505 at a cost of $7,700, and GS-80 is processed into 50 gallons of product GS-805 at a cost of $6,425. The production process starts at point 1. A total of $20,000 in joint manufacturing costs are incurred in reaching point 2. Point 2 is the split-off point of the process that manufactures GS-50 and GS-80. At this point, GS-50 can be sold for $800 a gallon, and GS-80 can be sold for $160 a gallon. The process is completed at point 3-products GS- 505 and GS-805 have a sales price of $600 a gallon and $240 a gallon, respectively. Required: Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales value at split-off, and (3) net realizable value. (Do not round Intermediate calculations. Round your final answers to nearest whole dollar amount.) (1) Physical measure (2) Sales value at split-off (3) Net realizable value GS-50 cost per unit GS-505 cost per unit GS-80 cost per unit GS-805 cost per unit Total cost per unit Total cost per unit

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 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...
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Northern Company processes 100 gallons of raw materials into 75 gallons of product GS-50 and 25 gallons of GS-80. GS-50 is further processed into 50 gallons of product GS-505 at a cost of $7,700, and GS-80 is processed into 50 gallons of product GS-805 at a cost of $6,425. The production process starts at point 1. A total of $20,000 in Joint manufacturing costs are incurred in reaching point 2. Point 2 is the split-off point of the process that manufactures GS-50 and GS-80. At this point, GS-50 can be sold for $800 a gallon, and GS-80 can be sold for $160 a gallon. The process is completed at point 3-products GS- 505 and GS-805 have a sales price of $600 a gallon and $240 a gallon, respectively. Required: Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales value at split-off, and (3) net realizable value. (Do not round Intermediate calculations. Round your final answers to nearest whole dollar amount.) (1) Physical measure (2) Sales value at split-off (3) Net realizable value GS-50 cost per unit GS-505 cost per unit GS-80 cost per unit GS-805 cost per unit Total cost per unit Total cost per unit
Transcribed Image Text:Northern Company processes 100 gallons of raw materials into 75 gallons of product GS-50 and 25 gallons of GS-80. GS-50 is further processed into 50 gallons of product GS-505 at a cost of $7,700, and GS-80 is processed into 50 gallons of product GS-805 at a cost of $6,425. The production process starts at point 1. A total of $20,000 in Joint manufacturing costs are incurred in reaching point 2. Point 2 is the split-off point of the process that manufactures GS-50 and GS-80. At this point, GS-50 can be sold for $800 a gallon, and GS-80 can be sold for $160 a gallon. The process is completed at point 3-products GS- 505 and GS-805 have a sales price of $600 a gallon and $240 a gallon, respectively. Required: Allocate the joint product costs and then compute the cost per unit using each of the following methods: (1) physical measure, (2) sales value at split-off, and (3) net realizable value. (Do not round Intermediate calculations. Round your final answers to nearest whole dollar amount.) (1) Physical measure (2) Sales value at split-off (3) Net realizable value GS-50 cost per unit GS-505 cost per unit GS-80 cost per unit GS-805 cost per unit Total cost per unit Total cost per unit
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