Joint cost allocation —market value at split-off method
Sugar Sweetheart, Inc., jointly produces raw sugar, granulated sugar, and caster sugar. After the split-off point, raw sugar is immediately sold for $0.20 per pound, while granulated and caster sugar are processed further. The market value of the granulated sugar and caster sugar is estimated to both be $0.25 at the split-off point. One batch of joint production costs $1,640 and yields 3,000 pounds of raw sugar, 3,600 pounds of granulated sugar, and 2,000 pounds of caster sugar at the split-off point. Allocate the joint costs of production to each product using the market value at split-off method.
Trending nowThis is a popular solution!
Chapter 5 Solutions
Bundle: Managerial Accounting, 15th + Cengagenowv2, 1 Term Printed Access Card
- Joint cost allocation Lovely Lotion Inc. produces three different lotions: hand, body, and foot. The lotions are produced jointly in a mixing process that costs a total of 250 per batch. At the split-off point, one batchproduces 80, 40, and 25 bottles of hand, body, and foot lotion, respectively. After the split-off point,hand lotion is sold immediately for 2.50 per bottle. Body lotion is processed further at an additional cost of 0.25 per bottle and then sold for 5.75 per bottle. Foot lotion is processed further atan additional cost of 0.85 per bottle and then sold for 4.00 per bottle. Assume that body and footlotion could be sold at the split-off point for 3.00 and 3.20 per bottle, respectively. Instructions 1. Using the market value at split-off method, allocate the joint costs of production to each product. 2. Based on the information provided and your answer to part (1), should Lovely LotionInc. continue processing body and foot lotion after the split-off point? 3. Allocate the joint costs of production to each product using the net realizable value method.arrow_forwardBreegle Company produces three products (B-40, J-60, and H-102) from a single process. Breegle uses the physical volume method to allocate joint costs of 22,500 per batch to theproducts. Based on the following information, which product(s) should Breegle continue toprocess after the split-off point in order to maximize profit? a. B-40 only b. J-60 only c. H-102 only d. B-40 and H-102 onlyarrow_forwardJoint Cost Allocation—Market Value at Split-off Method Man O’Fort Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing $28,000 per batch and producing 2,200 standard door handles and 1,100 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 $6 per door handle and the curved style for $3 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. Joint Product Allocation Standard door handle $fill in the blank 1 Curved door handle fill in the blank 2 Totals $fill in the blank 3arrow_forward
- Joint Cost Allocation-Market Value at Split-off Method Gripturn Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing $28,000 per batch and producing 1,800 standard door handles and 900 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 $10 per door handle and the curved style for $5 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. Joint Product Standard door handle Curved door handle Totals Allocationarrow_forwardJoint Cost Allocation-Market Value at Split-off Method Gripturn Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing $28,000 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 $10 per door handle and the curved style for $5 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. Joint Product Standard door handle Curved door handle Totals Feedback Allocationarrow_forwardJoint Cost Allocation—Net Realizable Value Method Lily’s Lemonade Stand makes three types of lemonade: pure, raspberry, and strawberry. The lemonade is produced through a joint mixing process that costs a total of $30 per batch. One batch produces 32 cups of pure lemonade, 21 cups of strawberry lemonade, and 21 cups of raspberry lemonade. After the split-off point, all three lemonades can be sold for $0.80 per cup, but strawberry and raspberry lemonade can be processed further by adding artificial coloring and flavoring and sold for $0.95 and $1.00 per cup, respectively. It is estimated that these additional processing costs are $0.75 and $1.80 per batch for strawberry and raspberry lemonade, respectively. Allocate the joint costs of production to each product using the net realizable value method. Joint Product Allocation Pure lemonade $ Strawberry lemonade Raspberry lemonade Totals $arrow_forward
- JOINT PRODUCTS: Machintosh Company produces two products from a common input. Common Input Question 1 The sales value of Product A at the split-off point (without further processing) is P 60,000. The sales value of Product B at the split-off point (without further processing) is P 120,000. Product A Product B *Note: Split-off point is the juncture in the process when the products become separately identifiable. If Product A will be processed further after the split-off point, it will incur a processing cost of P 22,197, but its sales value after further processing will now be P 96,829. What will be the profit for Product A after further processing?arrow_forwardJoint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch. Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places. Joint Product Allocation Washed $ Stained Pressure treated Totals $arrow_forwardJoint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch. Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places.arrow_forward
- Tendler Co. produces two products, X and Y, using a joint process. The following data has been given to you: Joint cost Unit selling prices of completely processed products Units produced and processed beyond split-off Processing cost beyond split-off point Total $3,300 450 $3,700 Allocate the joint cost using the net-realizable value method: X: S XIN Y: S ? $10 300 $1,100 Y ? $40 150 $2,60arrow_forwardJoint Product Standard door handle Joint Cost Allocation-Market Value at Split-off Method Man O'Fort Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing $27,000 per batch and producing 1,800 standard door handles and 900 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 $8 per door handle and the curved style for $4 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. Curved door handle Show Me How Totals Allocation My Work 2 more Check My Work uses remaining. #0 Previous Upda Nextarrow_forwardJoint Cost Allocation—Weighted Average Method Custom Carvings Company jointly produces wood chips and sawdust used in agriculture. The wood chips and sawdust are actually by-products of the company’s core operations, but Custom Carvings accounts for them just like normally produced goods because of their large volumes. One jointly produced batch yields 2,000 cubic yards of wood chips and 6,000 cubic yards of sawdust, and the estimated cost per batch is $27,300. However, the joint production of each good is not equally weighted. Given management estimates for how long it takes to make sawdust vs. wood chips, a weight factor of 14 is used for wood chips in the joint production process, and a weight factor of 2 is used for sawdust. Given this information, allocate the joint costs of production to each product using the weighted average method. Joint Product Allocation Sawdust Wood chips Totalsarrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,