Using the details provided, respond to the following query: Up until the moment of split-off, where two products, cream and liquid skim, are made and sold, Alfarm Corporation processes raw milk. There was no initial stockpile. For the month of February, the following information was gathered: Direct materials processed: 750,000 gallons (727,500 gallons of good product) Production: Cream 442,500 gallons Liquid skim 285,000 gallons Sales: Cream 421,500 at $110 per gallon Liquid skim 273,000 at $100 per gallon The cost of purchasing 750,000 gallons of direct materials and processing it up to the split-off point to yield a total of 727,500 gallons of good product was $2,280,000. When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to cream and liquid skim? Select one: a. $1,254,000 and $1,026,000 b. $1,368,000 and $912,000 c. $1,386,804 and $893,196 d. $1,140,000 and $1,140,000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Using the details provided, respond to the following query:
Up until the moment of split-off, where two products, cream and liquid skim, are made and sold, Alfarm Corporation processes raw milk. There was no initial stockpile. For the month of February, the following information was gathered:
Direct materials processed: 750,000 gallons (727,500 gallons of good product)
Production: Cream 442,500 gallons
Liquid skim 285,000 gallons
Sales: Cream 421,500 at $110 per gallon
Liquid skim 273,000 at $100 per gallon
The cost of purchasing 750,000 gallons of direct materials and processing it up to the split-off point to yield a total of 727,500 gallons of good product was $2,280,000.
When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to cream and liquid skim?
Select one:
a.
$1,254,000 and $1,026,000
b.
$1,368,000 and $912,000
c.
$1,386,804 and $893,196
d.
$1,140,000 and $1,140,000
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