Exercise 11-44 (Algo) Estimated Net Realizable Value Method -- Solve for Unknowns (LO 11-3) Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-O. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $154,750 after processing costs of $49,000. A batch of ALT-2 can be sold for $241,900 after further processing. The cost of ALT-0 is $200,000 for a batch. Using the estimated net realizable value method, a joint cost of $120,000 was allocated to ALT-2 for a batch. Required: Compute the separable processing cost for a batch of ALT-2 Note: Do not round intermediate calculations. Processing cost

Exercise 11-44 (Algo) Estimated Net Realizable Value Method -- Solve for Unknowns (LO 11-3) Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-O. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $154,750 after processing costs of $49,000. A batch of ALT-2 can be sold for $241,900 after further processing. The cost of ALT-0 is $200,000 for a batch. Using the estimated net realizable value method, a joint cost of $120,000 was allocated to ALT-2 for a batch. Required: Compute the separable processing cost for a batch of ALT-2 Note: Do not round intermediate calculations. Processing cost

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4PB

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ex4. Differential Analysis for Further Processing The management of International Aluminum Co. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for $2,200 per ton, and ingot can be sold without further processing for $1,100 per ton. Ingot is produced in batches of 80 tons by smelting 500 tons of bauxite, which costs $105 per ton of bauxite. Rolled aluminum will require additional processing costs of $620 per ton of ingot, and 1.25 tons of ingot will produce 1 ton of rolled aluminum (due to trim losses). Required: 1. Prepare a differential analysis as of February 5 to determine whether to sell aluminum ingot (Alternative 1) or process further into rolled aluminum (Alternative 2). Differential Analysis Sell Ingot (Alt. 1) or Process Further into Rolled Aluminum (Alt. 2) February 5 SellIngot(Alternative 1) ProcessFurther intoRolledAluminum(Alternative 2) DifferentialEffecton Income(Alternative 2) Revenues,…
(10) The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine the best average rate of return. Which machine has the best average rate of return? Machine A Machine B Machine C Estimated average annual income $43,540 $72,900 $72,600 Average investment 311,000 243,000 484,000
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Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-O. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $150,000 after processing costs of $30,000. A batch of ALT-2 can be sold for $240,000 after further processing. The cost of ALT-0 is $200,000 for a batch. Using the estimated net realizable value method, a joint cost of $120,000 was allocated to ALT-2 for a batch. Required: Compute the separable processing cost for a batch of ALT-2. Processing cost hs
Exploiting Internal Linkages Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Current activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Activities Activity Driver ActivityCapacity Current ActivityDemand Expected ActivityDemand Material usage Number of parts 210,000 210,000 210,000 Installing parts Direct labor hours 59,000 59,000 47,200 Purchasing parts Number of orders 31,600 27,018 16,590 Additionally, the following activity cost data are provided: Material usage: $28 per specialized part used; $25 per commodity part; no fixed activity cost. Installing parts: $21 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $49,000 annual salary; each…
Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-O. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $150,250 after processing costs of $31,000. A batch of ALT-2 can be sold for $240,100 after further processing. The cost of ALT-O is $200,000 for a batch. Using the estimated net realizable value method, a joint cost of $120,000 was allocated to ALT-2 for a batch Required: Compute the separable processing cost for a batch of ALT-2 Note: Do not round intermediate calculations. Processing cost
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Exercise 11-41 (Algo) Net Realizable Value Method: Multiple Choice (LO 11-7) Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,140 gallons of Chem-X with a cost of $102,600. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 25,080 $ 5.00 $ 2.00 $ 6.00 M-20 15,960 $ 10.00 $ 4.00 $ 16.00 B-60 5,700 $ 0.50 NA NA Oak View Chemicals uses the net realizable at split-off approach to allocate joint costs and treats the sales value of the by-product B-60 as other income. Required: The joint cost allocated to product M-10 at Oak View Chemicals for a given batch is Multiple Choice $62,700 $45,144 $43,890…
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