Cost Accounting (15th Edition)
Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
Question
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Chapter 16, Problem 16.29P

1.a.

To determine

To compute: Allocation of joint cost as per sales value at split off method:

Given information:

Joint cost is $62,000

Selling price of chocolate powder liquor base is $20.

Selling price of milk chocolate liquor base is $60.

1.b.

To determine

To compute: Allocation of joint cost as per physical measure method:

1.c.

To determine

To compute: Allocation of joint cost as per NRV method:

Given information:

Joint cost is $62,000

Total production of chocolate powder is 9,100 pounds.

Total production of milk chocolate is 14,980 pounds.

Selling price per pound of chocolate powder is $9 per pound.

Selling price per pound of milk chocolate is $10 per pound.

Separable cost is $110,215($50,100+$60,115)

1.d.

To determine

To compute: Allocation of joint cost as per constant gross margin percentage NRV method:

Given information:

Joint cost is $62,000.

Sales value of total production as computed is $968,800.

Separable cost is $110,215($50,100+$60,115)

2.a.

To determine

To compute: Gross margin percentage under sales value at split-off point.

2.b.

To determine

To compute: Gross margin percentage under physical measure method.

2.c.

To determine

To compute: Gross margin percentage under NRV method.

2.d.

To determine

To compute: Gross margin percentage under constant gross margin percentage NRV method.

3.

To determine

Effect on operating income due to change in decision to further process both intermediate products.

Given information:

Sales value after process is computed to be $81,900.

Sales value at split-off is computed as $14,000.

Separable cost is $50,100.

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