The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint process. June production is 10,000 widgets; 13,500 gizmos; and 15,000 turnbols. Respective per unit selling prices at split-off are $95, $60, and $20. Joint costs up to the split-off point are $187,500. What amount of joint costs will be allocated to the Turnbols? (Do not round any intermediary calculations.)

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Asked Dec 3, 2019
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The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint process. June production is 10,000 widgets; 13,500 gizmos; and 15,000 turnbols. Respective per unit selling prices at split-off are $95, $60, and $20. Joint costs up to the split-off point are $187,500.

 

What amount of joint costs will be allocated to the Turnbols? (Do not round any intermediary calculations.)

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Expert Answer

Step 1

Split-off Point

A split-off point is the location in a production process where jointly manufactured products are henceforth manufactured separately, thus their cost can be identified individually after the split-off point. Prior to the split-off point, production costs are allocated to jointly manufactured products.

Step 2

Calculation of joint cost allocated to t...

Determine the sales value of Turnbols at split-off as follows:
Sales Value of
= Number of units x Selling Price
Tumbols at split-off ]
= 15,000 x $20
= $300,000
Now, determine the total sales value of all products at the split-off.
Total Sales Value=(10,000 x $95) + (13,500x S60) + (15,000x $20)
= $950,000 + $810,000 +$300,000
= $2, 060,000
Calculate the amount of joint costs to be allocated to turnbols:
Sales Value of Turnbols at splitoff
Total Sales Value of all products
x Joint Costs
Joint costs to Turnbols =
$300,000
x$187,500
S2,060,000
= $27,305.82 Or
= $27,306
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Determine the sales value of Turnbols at split-off as follows: Sales Value of = Number of units x Selling Price Tumbols at split-off ] = 15,000 x $20 = $300,000 Now, determine the total sales value of all products at the split-off. Total Sales Value=(10,000 x $95) + (13,500x S60) + (15,000x $20) = $950,000 + $810,000 +$300,000 = $2, 060,000 Calculate the amount of joint costs to be allocated to turnbols: Sales Value of Turnbols at splitoff Total Sales Value of all products x Joint Costs Joint costs to Turnbols = $300,000 x$187,500 S2,060,000 = $27,305.82 Or = $27,306

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