Ron Chemicals produces four products from a joint process costing $450,000 permonth. After leaving the joint process, the products must be further refined before theyare salable. You have been provided with the following information:Product Volume Further Processing Costs Selling Price per UnitA-125,000$350,000B-315,000400,000C-220,000100,000Q-960,000250,000$65823520Allocate the joint costs using the physical unit's method.1. Physical Units Method.2. Net Realizable Value Method.

Step 1: Define Joint Costs:When a manufacturing process results in more than one product, the costs…

Answered: Ron Chemicals produces four products…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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SAMCIS Company produces three products (X, Y, and Z) in a joint process costing P100,000. The products can be sold as they leave the process, or they can be processed further and sold. The cost accountant has provided you with the following information: Separable Further Processing Costs P60,000 50,000 90,000 Sales Price at Split-Off Sales Price After Product Unit Volume Further Processing 3,000 4,000 8,000 Assume that all processing costs are variable costs. X Y P25 30 P10 15 20 35 Required: Which products should SAMCIS sell at split-off, and which products should be processed further?
Faustina Chemical Corporation manufactures three chemicals (TX14, NJ35, and KS63) from a joint process. The three chemicals are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this chemical process is as follows: TX14 NJ35 $ 12,000 $ 6,000 $ 16,000 $ 6,000 $ 20,000 $ 5,000 Sales value after further processing $ 18,000 $3,000 Cost of further processing For which product(s) above would it be more profitable for Faustina to sell at the split-off point rather than process further? Sales value at split-off point Allocated joint costs Multiple Choice O O TX14 only TX14 and KS63 only NJ35 and KS63 only KS63 only KS63 $ 5,000 $ 6,000 $9,000 $ 2,000
Presley produces three products from a joint process. The joint process has total costs of $500,000 per month. All three products, A, B, C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Units Immediate Sales Price Later Sales Prices Unit cost of Further Processing 1 5,000 $15 $20 $6 2 17,500 $20 $25 $4 3 10,000 $25 $32 $3 What is the total benefit the company would experience by following your recommendations vs. not processing any further? Hint: Give the sum of the benefits from each product you have chosen to process further.
Ron Chemicals produces four products from a joint process costing $150,000 per month. After leaving the joint process, the products must be further refined before they are salable. You have been provided with the following information: Product Volume Further Processing Costs Selling Price per Unit A-1 15,000 $350,000 $80 B-3 25,000 $400,000 $40 C-2 10,000 $100,000 422 Q-9 50,000 $250,000 $10 Required: Allocate the joint costs using the physical units method? Allocate the joint costs using the net realizable value method
SAMCIS Company produces three products (X, Y, and Z) in a joint process costing P100,000. The products can be sold as they leave the process, or they can be processed further and sold. The cost accountant has provided you with the following information: IIT Separable Further Processing Costs Sales Price Sales Price After Product Unit Volume at Split-Off Further Processing 3,000 4,000 8,000 P10 15 P60,000 50,000 90,000 P25 Y 30 20 35 Assume that all processing costs are variable costs. Required:/ Which products should SAMCIS sell at split-off, and which products should be processed further?
5.Arthur Corp. manufactures liquid chemicals A and B from a joint process. Joint costs are allocated on the basis of relative market value at split-off. It costs P4,560 to process 500 gallons of Product A and 1,000 gallons of Product B to the split-off point. The market value at split-off is P10 per gallon for Product A and P14 for Product B. Product B requires an additional process beyond split-off at a cost of P2 per gallon before it can be sold. What is Arthur's cost to produce 1,000 gallons of Product B? 6.The portion of joint cost allocated to Product A is
Agao Chemical Company manufactures three chemicals (NY29, TX38, and CA55) from a joint process. The three chemicals are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this chemical process is as follows: NY29 TX38 CA55 Sales value at split-off point P5,000 P16,000 P12,000 Allocated joint costs P6,000 P6,000 P6,000 Sales value after further processing P9,000 P20,000 P18,000 Cost of further processing P2,000 P5,000 P3,000 For which product(s) above would it be more profitable for Agao to sell at the split-off point rather than process further?
Joint Products Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of productA and 1,000 gallons of product B to the split-off point costs $5,600. The sales value at split-off is $2per gallon for product A and $30 per gallon for product B. Product B requires additional separableprocessing beyond the split-off point at a cost of $2.50 per gallon before it can be sold at a price of$34 per gallon.Required What is the company’s cost to produce 1,000 gallons of product B?
Corey Corporation manufactures joint products W and X. During a recent period, joint costs amounted to $320,000 in the production of 25,000 gallons of W and 60,000 gallons of X. Both products will be processed beyond the split-off point, giving rise to the following data: W X Separable processing costs $ 45,000 $ 150,000 Sales price (per gallon) if processed beyond split-off $ 15 $ 13 What would be the joint cost allocated to X under the net-realizable-value method ? Note: Do not round intermediate calculations.
Hsu Company manufactures two products (A and B) from a joint process that cost $330,000 for the year just ended. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Further information follows. Product Pounds Produced Per-Pound Sales Price If Processed Further Sales Value Separable Cost A 40,000 $ 12 $ 410,000 $ 120,000 B 60,000 8 320,000 70,000 If the joint costs are allocated based on the physical-units method, what would be the amount of joint cost assigned to product A?
A company currently produces three products from a joint process. The joint process has total costs of $515,000 per month. All three products, A, B, and C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Product A B Units 4,500 18,000 10,500 Immediate Sales Price $18 20 27 Later Sales Unit Cost of Further Processing $ 2.00 4.00 4.00 Price $ 19 25 33 Required: a-1. Should Product A be sold immediately or sold after processing further? a-2. How much will the decision affect profit? b-1. Should Product B be sold immediately or sold after processing further? b-2. How much will the decision affect profit? c-1. Should Product C be sold immediately or sold after processing further? c-2. How much will the decision affect profit?
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 Costs after Sales Value at Split-Off Split-Off at Completion $ $ $ R 120,000 260,000 420,000 D 80,000 140,000 190,000 A 150,000 190,000 350,000 Required: Using incremental analysis determine which products should be sold at split-off point and which should be processed further.

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