Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Textbook Question
Chapter 5, Problem 17E
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 112,000. 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:
Using the market value at split-off method, allocate the $12,000 joint cost of production to each product.
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Joint Cost Allocation—Market Value at Split-off Method
Burn-on Inc. 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 $15,800. 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:
Product
Unit Price
Gasoline
$2 per gallon
Diesel
1 per gallon
Kerosene
3 per gallon
Using the market value at split-off method, allocate the $15,800 joint cost of production to each product.
Joint Product
Allocation
Gasoline
$fill in the blank 1
Diesel
fill in the blank 2
Kerosene
fill in the blank 3
Totals
$fill in the blank 4
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
$
Chapter 5 Solutions
Managerial Accounting
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Incremental Analysis - Sell or Process Further; Author: Melissa Shirah;https://www.youtube.com/watch?v=7D6QnBt5KPk;License: Standard Youtube License