Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 12PB
Laramie Industries produces two joint products, H and C. Prior to the split-off point, the company incurred costs of $66,000. Product H weighs 44 pounds and product C weighs 66 pounds. Product H sells for $250 per pound and product C sells for $295 per pound. Based on a physical measure of output, allocate joint costs to products H and C.
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Calcion Industries produces two joint products, Y and Z. Prior to the split-off point, the company incurred costs of $31,000. Product Y weighs 15 pounds and product Z weighs 85 pounds. Product Y sells for $150 per pound and product Z sells for $125 per pound. Based on a physical measure of output, allocate joint costs to products Y and Z.
Product Y allocation $______
Product Z allocation $______
A company manufactures products X and Y using a joint process. The joint processing costs are P10,000. Products X and Y can be sold at split-off for P12,000 and P8,000 respectively. After split-off, product X is processed further at a cost of P5,000 and sold for P21,000 whereas product Y is sold without further processing. If the company uses the net realizable value method for allocating joint costs, the joint cost allocated to X is
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs
up to the split-off point total $370,000 per quarter. For financial reporting purposes, the company allocates these costs to
the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the
split-off point are as follows:
Product Selling Price
A
B
с
Product
A
$ 24.00 per pound
$ 18.00 per pound
$ 30.00 per gallon
Each product can be processed further after the split-off point. Additional processing requires no special facilities. The
additional processing costs (per quarter) and unit selling prices after further processing are given below:
B
C
Additional
Processing
Costs
$ 81,150
$ 117,125
$ 52,900
Quarterly Output
13,800 pounds
21,500 pounds
5,000 gallons
Required:
1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?
2. Based on…
Chapter 10 Solutions
Principles of Accounting Volume 2
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