Webster Company produces 35,000 units of product A, 30,000 units of product B, and 19,000 units of product C from the same manufacturing process at a cost of $430,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $40 for A, $20 for B, and $1 for C. None of the products requires separable processing. Of the units produced, Webster Company sells 28,000 units of A, 29,000 units of B, and 19,000 units of C. The firm uses the net realizable value method to allocate joint costs and by- product costs. Assume no beginning inventory. Required: 1. What is the value of the ending inventory of product A? 2. What is the value of the ending inventory of product B?

Webster Company produces 35,000 units of product A, 30,000 units of product B, and 19,000 units of product C from the same manufacturing process at a cost of $430,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $40 for A, $20 for B, and $1 for C. None of the products requires separable processing. Of the units produced, Webster Company sells 28,000 units of A, 29,000 units of B, and 19,000 units of C. The firm uses the net realizable value method to allocate joint costs and by- product costs. Assume no beginning inventory. Required: 1. What is the value of the ending inventory of product A? 2. What is the value of the ending inventory of product B?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products

Section: Chapter Questions

Problem 14E: LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of...

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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?
Venezuela Oil Inc. transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by-product base oil. The base oil is sold at the split-off point for $1,000,000 of annual revenue, and the joint processing costs to get the crude oil to split-off are $10,000,000. Additional information includes: Required: Determine the allocation of joint costs using the net realizable value method, rounding the sales value percentages to the nearest tenth of a percent. (Hint: Reduce the amount of the joint costs to be allocated by the amount of the by-product revenue.)
LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of Product Y, and 1,000 units of Product Z is $50,000. The unit sales values of the three products at the split-off point are Product X–$30, Product Y–$100, and Product Z–$90. Ending inventories include 200 units of Product X, 300 units of Product Y, and 100 units of Product Z. 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 values at split-off. Assume that Product Z can be sold for $120 a unit if it is processed after split-off at a cost of $10 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.
Laramie Industries produces two joint products, H and C. Prior to the split-off point, the company incurred costs of $66,000. Product H weighs 44 pounds and product C weighs 66 pounds. Product H sells for $250 per pound and product C sells for $295 per pound. Based on a physical measure of output, allocate joint costs to products H and C.
Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in 1,000-gallon drums for 2.000. Processing costs are 3,000 to process the 1,000 gallons of Duointo 800 gallons of Big and 200 gallons of Mini. The selling price is 9 per gallon for Big and4 per gallon for Mini. If the physical units method is used to allocate joint costs to the finalproducts, the total cost allocated to produce Mini is: a. 500. b. 4,000. c. 1,000. d. 4,500.
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?
Columbia Products Inc. has two divisions, Salem and Seaside. For the month ended March 31, Salem had sales and variable costs of 500,000 and 225,000, respectively, and Seaside had sales and variable costs of 800,000 and 475,000, respectively. Salem had direct fixed production and administrative expenses of 60,000 and 35,000, respectively, and Seaside had direct fixed production and administrative expenses of 80,000 and 45,000, respectively. Fixed costs that were common to both divisions and couldnt be allocated to the divisions in any meaningful way were selling, 33,000, and administration, 27,000. Prepare a segmented income statement by division for March.
Man OFort Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing 29,000 per batch and producing 2,000 standard door handles and 1,000 curved door handles at the split-off point. Both door handles undergo additional production processes after the split-off point, but could be sold at that point: the standard style for 4 per door handle and the curved style for 2 per door handle. Determine the amount of joint production costs allocated to each style of door handle using the market value at split-off method.
Webster Company produces 36,000 units of product A, 28,000 units of product B, and 11,000 units of product C from the same manufacturing process at a cost of $350,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $20 for A, $10 for B, and $1 for C. None of the products requires separable processing. Of the units produced, Webster Company sells 29,000 units of A, 27,000 units of B, and 11,000 units of C. The firm uses the net realizable value method to allocate joint costs and by-product costs. Assume no beginning inventory. Required: 1. What is the value of the ending inventory of product A? 2. What is the value of the ending inventory of product B?
Tanner Corporation produced 3,600 units, consisting of three separate products, in a joint process for the year. The market for these products was so unstable that it was not practical to estimate the selling price of the products. A cost of $488,000 was incurred in the joint process. Product X's production was 80% of product Y's while product Z's production was 120% of product Y's. What is the amount of the joint cost allocable to product X assuming Tanner uses the physical quantities method of allocation? Note: Do not round intermediate calculations. O $130,133 $133,523 $158,002 Saved $160.325
Moper Corporation manufactures three identifiable product lines, Products A, B, and C, from a basic processing operation. The cost of the basic operation is $320,000 for a yield of 5,000 tons of Product A; 2,000 tons of Product B; and 1,000 tons of Product C. The basic processing cost is allocated to the product lines in proportion to the relative weight produced.Moper Corporation does both the basic processing work and the furtherrefinement of the three product lines. After the basic operation, the products can be sold at the following prices per metric ton:Product A—$60Product B—$53Product C—$35Costs to refine each of the three product lines follow: A B C Variable cost per metric ton $8 $7 $4 Total fixed cost $20,000 $16,000 $6,000 The fixed cost of the refining operation will not be incurred if the product line is not refined. The refined products can be sold at the following prices per metric ton:Product A—$75Product B—$65Product C—$40Required:i. Determine the total…
Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $77,300, and 14,000 units of ins and 36,000 units of outs were produced. Separable processing costs beyond the split-off point were as follows: ins, $17,500; outs, $9,000. Ins sell for $8.00 per unit; outs sell for $15.00 per unit. Required: Allocate the $77,300 joint costs using the estimated net realizable value method. Suppose that ins could be sold at the split-off point for $7.00 per unit. Should Arvin sell ins at split-off or process them further? Show supporting computations. Which of the four data analytic types—descriptive, diagnostic, predictive, or prescriptive—is used to determine whether Arvin should process further or sell at the split-off point?