ABC Co. produces products R, J, and C from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $92,000 per year are allocated to the products based on the relative number of units produced. Data for ABC Co.'s operations for the current year are as follows: Product R J с Units Produced 8,000 10,000 5,000 Allocated Joint Production Cost $32,000 40,000 20,000 Sales Value at Split-off $76,000 71,000 48,000 Product R can be processed beyond the split-off point for an additional cost of $26,000 and can then be sold for $105,000. Product J can be processed beyond the split-off point for an additional cost of $38,000 and can then be sold for $117,000. Product C can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $57,000. Required: Which products should be processed beyond the split-off point? Show all of your work.

ABC Co. produces products R, J, and C from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $92,000 per year are allocated to the products based on the relative number of units produced. Data for ABC Co.'s operations for the current year are as follows: Product R J с Units Produced 8,000 10,000 5,000 Allocated Joint Production Cost $32,000 40,000 20,000 Sales Value at Split-off $76,000 71,000 48,000 Product R can be processed beyond the split-off point for an additional cost of $26,000 and can then be sold for $105,000. Product J can be processed beyond the split-off point for an additional cost of $38,000 and can then be sold for $117,000. Product C can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $57,000. Required: Which products should be processed beyond the split-off point? Show all of your work.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...

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LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of Product Y, and 1,000 units of Product Z is $50,000. The unit sales values of the three products at the split-off point are Product X–$30, Product Y–$100, and Product Z–$90. Ending inventories include 200 units of Product X, 300 units of Product Y, and 100 units of Product Z. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their sales values at split-off. Assume that Product Z can be sold for $120 a unit if it is processed after split-off at a cost of $10 a unit. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their net realizable values.
Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?
Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were 50,000, and 14,000 units of overs and 36,000 units of unders were produced. Separable processing costs beyond the split-off point were as follows: overs, 18,000; unders, 23,040. Overs sell for 2.00 per unit; unders sell for 3.14 per unit. Required: 1. Allocate the 50,000 joint costs using the estimated net realizable value method. 2. Suppose that overs could be sold at the split-off point for 1.80 per unit. Should Pacheco sell overs at split-off or process them further? Show supporting computations.
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.
Cat Company produces products C, A, and T from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $75,000 per year are allocated to the products based on the relative number of units produced. Data for Cat's operations for the current year are as follows: Units Allocated Joint Sales Value Product Produced Production Cost At Split-off C 12,000 $23,000 $80,000 A 8,000 34,000 71,000 T 13,000 18,000 51,000 Product C can be processed beyond the split-off point for an additional cost of $29,000 and can then be sold for $103,000. Product A can be processed beyond the split-off point for an additional cost of $31,000 and can then be sold for $116,000. Product T can be processed beyond the split-off point for an additional cost of $17,000 and can then be sold for $65,000. Which products should be processed beyond the split-off point? (Show all calculations) What is a joint product cost? Explain in your own words.
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $45,500 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $27,300 $ 18,200 $ 45,500 Sales value at split-off point $ 30,000 $20,000 $50,000 Costs of further processing $ 24,200 $ 18,500 $ 42,700 Sales value after further processing $ 47,800 $58,300 $ 106,100 Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d.…
Benjamin Signal Company produces products R, J, C from a joint process. Each product may be sold at the split off point or be processed further. Joint production costs of $92,000 are allocated to the products based on the relative number of units produced. Data for the current year operations follow: Product Units Allocated Joint Sales Value at Produced Production Spit off Cost $ 32,000 $ 40,000 $ 20,000 $ 76,000 $ 71,000 $ 48,000 R 8,000 10,000 5,000 Product R can be processed beyond the split off point for an additional cost of $26,000 and can then be sold for $105,000. Product J can be processed beyond the split off point for an additional $38,000 and then sold for $117,000. Product C can be processed beyond the split off point for an additional $12,000 and then sold for $57,000. Required: Which products should be processed beyond the split off point? Show your calculations.
CUIK-983 company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. 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 Quarterly Output 10,000 pounds A $ 5 per pound B $ 6 per pound 22,000 pounds C $ 14 per gallon 5,000 gallons 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: Additional Product Processing Costs Selling Price A $ 53,000 B $ 38,000 C $ 18,000 Which products should be processed further? Multiple Choice Multiple Choice B and C A and C A, B, and C A and B $ 7 per pound $ 11 per pound $20 per gallon
ats Assume a company has three products-A, B, and C-that emerge from a joint process. The joint processing costs that are incurred up to the split-off point equal $1,200,000. The selling prices and outputs for each product at the split-off point are as follows: Product A B С Selling Price $33 per pound $29 per pound $24 per pound Product A B C Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows: Output 14,000 pounds 18,000 pounds 19,000 pounds Additional Processing Costs $65,000 $72,000 $88,000 Selling Price $37 per pound $34 per pound $30 per pound The company is trying to decide whether to retain or discontinue the entire joint manufacturing process. What is the financial advantage (disadvantage) of continuing to operate the entire joint manufacturing process?
Collie Company has a joint process that produces three products: R, D and A. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $300,000. Other relevant data are as follows: Product Sales Value at Split off Costs after Split off Sales Value At Completion $ $ $ R 120,000 260,000 420,000 D 80,000 $140,000 190,000 A 150,000 $190,000 350,000 Required: Determine total net income if all products are sold at split-off point. 2. Determine total net income if all products are sold after processing. 3. Using incremental analysis determine which products should be sold at split-off point and which should be processed further
CUIK-649 company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. 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 Quarterly Output 10,000 pounds A $ 4 per pound B $ 6 per pound 22,000 pounds с $ 10 per gallon 5.000 gallons 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: Additional Product Processing Costs Selling Price A $ 53.000 $ B $ 38,000 $ с $ 18,000 $ Which products should be processed further? Multiple Choice O O O A and B A and C B and C AR and C 7 per pound 12 per pound 19 per gallon
Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows: X Y Z Total Units produced 14,000 10,000 6,000 30,000 Allocated joint costs $ 204,000 $ 90,000 $ 66,000 $ 360,000 Sales value at split-off ? 150,000 110,000 600,000 Additional costs for further processing 38,000 30,000 22,000 90,000 Sales value if processed further 348,000 185,000 147,000 680,000 Product X's sales value at the split-off point is: