Gen Combo Fundamentals Of Cost Accounting; Connect Access Card
6th Edition
ISBN: 9781260848700
Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 11, Problem 74P
Effect of By-Product versus Joint Cost Accounting
Fisher Chemicals processes a liquid into three outputs: Sigma, Tau, and Upsilon. Sigma accounts for 60 percent of the net realizable value at the split-off point, Tau accounts for 30 percent, and Upsilon accounts for the balance. The joint costs total $640,000. If Upsilon is accounted for as a by-product, its $70,000 net realizable value at split-off is credited to the joint
Required
- a. What are the allocated joint costs for the three outputs
- 1. If Upsilon is accounted for as a joint product?
- 2. If Upsilon is accounted for as a by-product?
- b. Management does not understand why joint costs are allocated to Upsilon differently when it is accounted for as a by-product. Write a brief memo explaining why this occurs.
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Net Realizable Value Method, Decision to Sell at Split-off or Process Further
Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $60,000, 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, $102,000; outs, $450,000. Ins sell for $8.00 per unit; outs sell for $15.00 per unit.
Required:
1. Allocate the $60,000 joint costs using the estimated net realizable value method.
Allocated Joint Cost
Ins
$fill in the blank 1
Outs
$fill in the blank 2
2. 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?Ins
be processed further as there will be $fill in the blank 4
profit if sold at split-off.
Net Realizable Value Method, Decision to Sell at Split - off or Process Further Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were $60,000, and 15,000 units of overs and 34,000 units of unders were produced. Separable processing costs beyond the split - off point were as follows: overs, $20, 000; unders, $ 16,760. Overs sell for $2.00 per unit; unders sell for $ 3.14 per unit. Required: 1. Allocate the $60,000 joint costs using the estimated net realizable value method. Allocated Joint Cost Overs $ Unders $2.
Suppose that overs could be sold at the split - off point for $1.80 per unit. Should Pacheco sell overs at split - off or process them further? Overs should not be processed further as there will be $ more profit if sold at split - off.
Tango Company produces joint products M, N, and T from a joint process. This information concerns a batch produced in April at a joint cost of $175,000:
Product
Units Produced and Sold
After Split-Off
Total Separable Costs
Total Final Sales Value
M
15,500
$ 18,200
$ 215,000
N
9,500
14,600
195,000
T
10,500
3,200
36,000
How much of the joint cost should be allocated to each joint product using the net realizable value method?
Chapter 11 Solutions
Gen Combo Fundamentals Of Cost Accounting; Connect Access Card
Ch. 11 - Why do companies allocate costs? What are some of...Ch. 11 - What are the three methods of allocating service...Ch. 11 - What are the similarities and differences among...Ch. 11 - What criterion should be used to determine the...Ch. 11 - What is a limitation of the direct method of...Ch. 11 - What is a limitation of the step method of...Ch. 11 - Prob. 7RQCh. 11 - Why would a number of accountants express a...Ch. 11 - Prob. 9RQCh. 11 - What is the basic difference between the...
Ch. 11 - Prob. 11RQCh. 11 - If cost allocations arc arbitrary and potentially...Ch. 11 - Prob. 13CADQCh. 11 - Prob. 14CADQCh. 11 - Prob. 15CADQCh. 11 - Prob. 16CADQCh. 11 - Prob. 17CADQCh. 11 - Prob. 18CADQCh. 11 - What are some of the factors that a company needs...Ch. 11 - Prob. 20CADQCh. 11 - Prob. 21CADQCh. 11 - Prob. 22CADQCh. 11 - How is joint cost allocation like service...Ch. 11 - Prob. 24CADQCh. 11 - In what ways is joint cost allocation similar to...Ch. 11 - Why Are Costs Allocated?Ethical Issues You are the...Ch. 11 - Cost Allocation: Direct Method Caro Manufacturing...Ch. 11 - Allocating Service Department Costs First to...Ch. 11 - Cost Allwat ion: Direct Method University Printers...Ch. 11 - Prob. 30ECh. 11 - Cost Allocation: Step Method
Refer to the data for...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Cost Allocation: Reciprocal Method, Two Service...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Prob. 35ECh. 11 - Prob. 36ECh. 11 - Prob. 37ECh. 11 - Prob. 38ECh. 11 - Prob. 39ECh. 11 - Prob. 40ECh. 11 - Net Realizable Value Method: Multiple Choice
Oak...Ch. 11 - Sell or Process Further: Multiple Choice
Refer to...Ch. 11 - Net Realizable Value Method Euclid Corporation...Ch. 11 - Estimated Net Realizable Value Method Blasto,...Ch. 11 - Net Realizable Value Method to Solve for Unknowns...Ch. 11 - Net Realizable Value Method Bixel Components...Ch. 11 - Net Realizable Value Method with By-Products...Ch. 11 - Net Realizable Value Method Deming Sons...Ch. 11 - Physical Quantities Method
Refer to the facts in...Ch. 11 - Sell or Process Further
Refer to the facts in...Ch. 11 - Physical Quantities Method The following questions...Ch. 11 - Physical Quantities Method; Sell or Process...Ch. 11 - Physical Quantities Method with By-Product...Ch. 11 - Step Method with Three Service Departments Model,...Ch. 11 - Comparison of Allocation Methods BluStar Company...Ch. 11 - Solve for Unknowns: Direct Method Franks Foods has...Ch. 11 - Solve for Unknowns: Step Method RT Renovations is...Ch. 11 - Cost Allocation: Step Method with Analysis and...Ch. 11 - Prob. 59PCh. 11 - Prob. 60PCh. 11 - Direct, Step, and Reciprocal Methods:...Ch. 11 - Cost Allocation: Step and Reciprocal Methods...Ch. 11 - Allocate Service Department Costs: Direct and Step...Ch. 11 - Prob. 64PCh. 11 - Prob. 65PCh. 11 - Prob. 66PCh. 11 - Prob. 67PCh. 11 - Prob. 68PCh. 11 - Fletcher Fabrication, Inc., produces three...Ch. 11 - Findina Missing Data: Net Realizable Value Spartan...Ch. 11 - Finding Missing Data: Net Realizable Value Blaine,...Ch. 11 - Joint Costing in a Process Costing Context:...Ch. 11 - Find Maximum Input Price: Estimated Net Realizable...Ch. 11 - Effect of By-Product versus Joint Cost Accounting...Ch. 11 - Prob. 75PCh. 11 - Prob. 76P
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