Answered: Using the market value at split-off…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 17E: Joint cost allocation-market value at split-off method Toil Oil processes crude oil to jointly...

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Joint Cost Allocation—Market Value at Split-off Method

Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of $12,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows:

Gasoline	$2 per gallon
Diesel	1 per gallon
Kerosene	3 per gallon

Using the market value at split-off method, allocate the $12,000 joint cost of production to each product.

Joint Product	Allocation
Gasoline	$
Diesel
Kerosene
Totals	$

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