QUESTION-JP Itd produces three joint products- A, B and C- which are then further processed. It is normal practice for the companyto apportion all pre-separation costs on the basis of weight of output of each joint product.Data for the last period is as follows:Costs incurred up to separation point£9,600Product AProduct BProduct COutput (kg)1006080£Costs incurred after separation2,0001,200800Point selling price per kgAfter further processingAt pre-separation point (estimate)508060257045RequirementsPrepare a statement showing the profit or loss mad by each product using the present method of apportioning pre-separation costs.Advise the management of JP Itd whether or not, on purely financial grounds, it should further process any of the threeproducts.

Name: QUESTION-JP Itd produces three joint products- A, B and C- which are
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: QUESTION-JP Itd produces three joint products- A, B and C- which are then further processed. It is normal practice for the companyto apportion all pre-separation costs on the basis of weight of output of each joint product.Data for the last period i

When product can be further processed or can be sold at split off , then we need to consider the…

Business

Accounting

QUESTION- JP Itd produces three joint products- A, B and C- which are then further processed. It is normal practice for the company to apportion all pre-separation costs on the basis of weight of output of each joint product. Data for the last period is as follows: Costs incurred up to separation point £9,600 Product A Product B Product C Output (kg) 100 60 80 £ £ Costs incurred after separation Point selling price per kg 2,000 1,200 800 After further processing 50 80 60 At pre-separation point (estimate) 25 70 45 Requirements Prepare a statement showing the profit or loss mad by each product using the present method of apportioning pre- separation costs. Advise the management of JP Itd whether or not, on purely financial grounds, it should further process any of the three products.

QUESTION- JP Itd produces three joint products- A, B and C- which are then further processed. It is normal practice for the company to apportion all pre-separation costs on the basis of weight of output of each joint product. Data for the last period is as follows: Costs incurred up to separation point £9,600 Product A Product B Product C Output (kg) 100 60 80 £ £ Costs incurred after separation Point selling price per kg 2,000 1,200 800 After further processing 50 80 60 At pre-separation point (estimate) 25 70 45 Requirements Prepare a statement showing the profit or loss mad by each product using the present method of apportioning pre- separation costs. Advise the management of JP Itd whether or not, on purely financial grounds, it should further process any of the three products.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 10PA: Clarion Industries produces two joint products, Y and Z. Prior to the split-off point, the company...

See similar textbooks

Similar questions

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs 12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows: Required: 1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. (Round the percentages to four significant digits. Round all cost allocations to the nearest dollar.) 2. What if it cost 2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products?
Breegle Company produces three products (B-40, J-60, and H-102) from a single process. Breegle uses the physical volume method to allocate joint costs of 22,500 per batch to theproducts. Based on the following information, which product(s) should Breegle continue toprocess after the split-off point in order to maximize profit? a. B-40 only b. J-60 only c. H-102 only d. B-40 and H-102 only
Clarion Industries produces two joint products, Y and Z. Prior to the split-off point, the company incurred costs of $36,000. Product Y weighs 25 pounds and product Z weighs 75 pounds. Product Y sells for $150 per pound and product Z sells for $125 per pound. Based on a physical measure of output, allocate joint costs to products Y and Z.
Computing joint costssales value at split-off and net realizable value methods D.L. Manufacturing Inc.s joint cost of producing 1,000 units of Product A, 500 units of Product B, and 500 units of Product C is 20,000. The unit sales values of the three products at the split-off point are Product A20, Product B200, and Product C160. Ending inventories include 100 units of Product A, 200 units of Product B, and 300 units of Product C. a. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their sales value at split off. b. Assume that Product C can be sold for 200 a unit if it is processed after split-off at a cost of 25 a unit. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their net realizable values.
Joint cost allocation-market value at split-off method Toil Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of 112,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows: Using the market value at split-off method, allocate the 12,000 joint cost of production to each product.
Board-It, Inc., produces the following types of 2 4 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of 710 per batch. Using the physical units method, allocate the joint production cost to each product.
Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?
Ardmore Company produces two main products jointly, A and B, and C, which is a by-product of B. A and B are produced from the same raw material. C is manufactured from the residue of the process creating B. Costs before separation are apportioned between the two main products by the net realizable value method. The net revenue realized from the sale of C is deducted from the cost of B. Data for April were as follows: Costs before separation P200,000 Costs after separation: A 50,000 B 32,000 C 4,000 Production for April, in pounds: A 800,000 B 200,000 C 20,000 Sales for April: A 640,000 pounds @ P0.4375 B 180,000 pounds @ 0.65 C 20,000 pounds @ 0.30 Determine the gross profit for April.
A Chemical Company manufactures joint products Pep and Vim, and a by-product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow: Pep Vim Zest Units Produced 5,000 4,000 1,000 Sales price per unit 50.00 40.00 5.00 Further processing cost per unit 10.00 5.00 0.00 Selling & Adm. Expense per unit 0.00 0.00 2.00 Operating Profit per unit 0.00 0.00 1.00 The value of Zest to be deducted from the joint cost is
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, andthe by-product is Bit. Marshall accounts for the costs of its products using the net realizable valuemethod. 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 activityat Marshall is shown below:Ying Yang BitUnits sold 50,000 40,000 10,000Units produced 50,000 40,000 10,000Separable processing costs—variable $140,000 $42,000 $—Separable processing costs—fixed $10,000 $8,000 $—Sales price $6.00 $12.50 $1.60Total joint costs for Marshall in the recent month are $265,000, of which $115,000 is a variable cost.Required1. Calculate the manufacturing cost per unit for each of the three products.2. Calculate the total gross margin for each product
Agao Chemical Company manufactures three chemicals (NY29, TX38, and CA55) from a joint process. The three chemicals are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this chemical process is as follows: NY29 TX38 CA55 Sales value at split-off point P5,000 P16,000 P12,000 Allocated joint costs P6,000 P6,000 P6,000 Sales value after further processing P9,000 P20,000 P18,000 Cost of further processing P2,000 P5,000 P3,000 For which product(s) above would it be more profitable for Agao to sell at the split-off point rather than process further?
A Chemical Company manufactures joint products Pep and Vim, and a by product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow: Pep Vim Zest Unit Produced 5000 4000 1000 Sales price per unit 50 40 5 Further processing cost per unit 10 5 0 Selling and adm. Expense per unit 0 0 2 operating profit per unit 0 0 1 Required: The gross profit for pep is The value of Zest to deducted from the joint cost is