A Florida processing company, Sunshine ToGo, produces two products from a joint process: Alpha and Omega. Joint processing costs for this month's production cycle are $18,000. Pounds Sales price per pound at split-off Disposal cost per pound at split-off Further processing per pound Final sale price per pound Alpha 1,260 $7.00 $4.50 $1.50 $ 8.00 Omega 2,940 10.00 6.00 3.50 12.25 If Alpha and Omega are processed further, no disposal costs will be incurred or such costs will be borne by the buyer. Using sales value at split-off, what amount of joint processing cost is allocated to Alpha (round to the nearest dollar)? Group of answer choices $13,846 $4,154 $2,938 $5,400
A Florida processing company, Sunshine ToGo, produces two products from a joint process: Alpha and Omega. Joint processing costs for this month's production cycle are $18,000.
|
Pounds |
Sales price per pound at split-off |
Disposal
cost per pound at split-off |
Further processing per pound |
Final sale price per pound |
|
| Alpha |
1,260
|
$7.00
|
$4.50
|
$1.50
|
$ 8.00
|
| Omega |
2,940
|
10.00
|
6.00
|
3.50
|
12.25
|
If Alpha and Omega are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Using sales value at split-off, what amount of joint
Lets understand the basics.
In sales value at spllit off method, joint processing cost allocated to product using the sales value of the product against the total sales value.
Joint cost allocated to product = Total joint cost * (Sales value of joint product/Sales value of total product)
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