Adhesives Company makes three widely used industrial adhesives: A101, A204, and B216. Sales and production information for each of the three adhesives are showr in the following table. Most of Johnston's customers ask for a special blend of the three products which improves heat-resistance. The additional separable processing requires additional time anc materials, and the price is increased accordingly, as shown in the table. Assume that Johnston pro- duces only for specific customer orders, so there is no beginning or ending inventory. Assume als that all of Johnston's customers requested the heat-resistant version of the products so that all produc tion required additional separable processing. Total joint cost for the three products is $3,500,000. A101 A204 B216 115,000 175,000 2$ Gallons sold 135,000 14 10 12 Final sales price per gallon Price at split-off Separable processing cost 10 10 $550,000 $125,000 $625,000

Adhesives Company makes three widely used industrial adhesives: A101, A204, and B216. Sales and production information for each of the three adhesives are showr in the following table. Most of Johnston's customers ask for a special blend of the three products which improves heat-resistance. The additional separable processing requires additional time anc materials, and the price is increased accordingly, as shown in the table. Assume that Johnston pro- duces only for specific customer orders, so there is no beginning or ending inventory. Assume als that all of Johnston's customers requested the heat-resistant version of the products so that all produc tion required additional separable processing. Total joint cost for the three products is $3,500,000. A101 A204 B216 115,000 175,000 2$ Gallons sold 135,000 14 10 12 Final sales price per gallon Price at split-off Separable processing cost 10 10 $550,000 $125,000 $625,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 17E

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7-45 Joint Products A101, A204, and B216. Sales and production information for each of the three adhesives are shown in the following table. Most of Johnston's customers ask for a special blend of the three products, which improves heat-resistance. The additional separable processing requires additional time and materials, and the price is increased accordingly, as shown in the table. Assume that Johnston pro- duces only for specific customer orders, so there is no beginning or ending inventory. Assume also that all of Johnston's customers requested the heat-resistant version of the products so that all produc- tion required additional separable processing. Total joint cost for the three products is $3,500,000. Johnston Adhesives Company makes three widely used industrial adhesives: A101 A204 B216 175,000 %$4 135,000 $4 115,000 $. Gallons sold 14 10 12 Final sales price per gallon Price at split-off Separable processing cost 10 10 $550,000 $125,000 $625,000
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Product X-547 is one of the joint products in a joint manufacturing process. Management is considering whether to sell X-547 at the split-off point or to process X-547 further into Xylene. The following data have been gathered: 1. Selling price of X-547 II. Variable cost of processing X-547 into Xylene. III. The avoidable fixed costs of processing X-547 into Xylene. IV. The selling price of Xylene. V. The joint cost of the process from which X-547 is produced. Which of the above items are relevant in a decision of whether to sell the X-547 as is or process it further into Xylene? Multiple Choice I, II, and IV. I, II, III, and IV. II, III, and V. I, II, III, and V.
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The Jabba Corporation manufactures the "Snack Buster" which consists of a wooden snack chip bowl with an attached porcelain dip bowl. Which of the following would be relevant in Jabba's decision to make the dip bowls or buy them from an outside supplier? A) B) C) D) Fixed overhead cost that can be eliminated if the bowls are purchased from the The variable selling cost of outside supplier the Snack Buster Multiple Choice O O O O Choice A Choice B Choice C Choice D Yes Yes No No Yes No Yes No
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