The Killian Company manufactures two skin care lotions, Liquid Skin and Silken Skin, out of a joint process. The joint (common) costs incurred are $420,000 for a standard production run that generates 180,000 gallons of Liquid Skin and 120,000 gallons of Silken Skin. Liquid Skin sells for $2.40 per gallon while Silken Skin sells for $3.90 per gallon.Assuming both products are sold at the split-off point, the amount of joint cost of each production run allocated to Liquid Skin on a net realizable value is?If there are additional costs are incurred after the split-off point, the amount of joint cost of each production run allocated to Silken Skin on a physical-quantity basis is?

Joint cost incurred to produce different products has to be allocated to different products on some…

Answered: The Killian Company manufactures two…

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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The Killian Company manufactures two skin care lotions, Liquid Skin and Silken Skin, out of a joint process. The joint (common) costs incurred are $420,000 for a standard production run that generates 180,000 gallons of Liquid Skin and 120,000 gallons of Silken Skin. Liquid Skin sells for $2.40 per gallon while Silken Skin sells for $3.90 per gallon.

Assuming both products are sold at the split-off point, the amount of joint cost of each production run allocated to Liquid Skin on a net realizable value is?
If there are additional costs are incurred after the split-off point, the amount of joint cost of each production run allocated to Silken Skin on a physical-quantity basis is?

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