Alphabet Soup Inc jointly produces A, B, and C at a joint cost of $100,000. The company uses the production method for byproducts and has estimated that B is a byproduct of manufacturing A and C with an estimated NRV of $6,000. The estimated NRVS of A and C are $80,000 and $80,000, respectively. If Alphabet Soup uses the NRV method in allocating joint costs, what will the cost allocation be? Select one: O a. $49,000 to A, $2,000 to B, and $49,000 to C. O b. $48,000 to A, $2,000 to B, and $48,000 to C. O c. $47,000 to A, $0 to B, and $47,000 to C. O d. $50,000 to A, $0 to B, and $50,000 to C. cross out cross out cross out cross out

Alphabet Soup Inc jointly produces A, B, and C at a joint cost of $100,000. The company uses the production method for byproducts and has estimated that B is a byproduct of manufacturing A and C with an estimated NRV of $6,000. The estimated NRVS of A and C are $80,000 and $80,000, respectively. If Alphabet Soup uses the NRV method in allocating joint costs, what will the cost allocation be? Select one: O a. $49,000 to A, $2,000 to B, and $49,000 to C. O b. $48,000 to A, $2,000 to B, and $48,000 to C. O c. $47,000 to A, $0 to B, and $47,000 to C. O d. $50,000 to A, $0 to B, and $50,000 to C. cross out cross out cross out cross out

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products

Section: Chapter Questions

Problem 13P: Venezuela Oil Inc. transports crude oil to its refinery where it is processed into main products...

See similar textbooks

Similar questions

Venezuela Oil Inc. transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by-product base oil. The base oil is sold at the split-off point for $1,000,000 of annual revenue, and the joint processing costs to get the crude oil to split-off are $10,000,000. Additional information includes: Required: Determine the allocation of joint costs using the net realizable value method, rounding the sales value percentages to the nearest tenth of a percent. (Hint: Reduce the amount of the joint costs to be allocated by the amount of the by-product revenue.)
A Corporation manufactures two products out of a joint process—X and Y. The joint (common) costs incurred are Php250,000 for a standard production run that generates 120,000 gallons of X and 80,000 gallons of Y. X sells for Php2.00 per gallon, while Y sells for Php3.25 per gallon. If there are no additional processing costs incurred after the split-off point, what is the amount of joint cost of each production run allocated to Product X?
Tanner Corporation produced 3,600 units, consisting of three separate products, in a joint process for the year. The market for these products was so unstable that it was not practical to estimate the selling price of the products. A cost of $488,000 was incurred in the joint process. Product X's production was 80% of product Y's while product Z's production was 120% of product Y's. What is the amount of the joint cost allocable to product X assuming Tanner uses the physical quantities method of allocation? Note: Do not round intermediate calculations. O $130,133 $133,523 $158,002 Saved $160.325
Webster Company produces 36,000 units of product A, 28,000 units of product B, and 11,000 units of product C from the same manufacturing process at a cost of $350,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $20 for A, $10 for B, and $1 for C. None of the products requires separable processing. Of the units produced, Webster Company sells 29,000 units of A, 27,000 units of B, and 11,000 units of C. The firm uses the net realizable value method to allocate joint costs and by-product costs. Assume no beginning inventory. Required: 1. What is the value of the ending inventory of product A? 2. What is the value of the ending inventory of product B?
Two products, QI and VH, emerge from a joint process. Product QI has been allocated $24,300 of the total joint costs of $45,000. A total of 3,100 units of product QI are produced from the joint process. Product QI can be sold at the split-off point for $15 per unit, or it can be processed further for an additional total cost of $11,100 and then sold for $17 per unit. If product QI is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point?
A company manufactures products X and Y using a joint process. The joint processing costs are P10,000. Products X and Y can be sold at split-off for P12,000 and P8,000 respectively. After split-off, product X is processed further at a cost of P5,000 and sold for P21,000 whereas product Y is sold without further processing. If the company uses the net realizable value method for allocating joint costs, the joint cost allocated to X is
Carving Creations jointly produces wood chips and sawdust used in agriculture. The wood chips and sawdust are actually by-products of the company’s core operations, but Carving Creations accounts for them just like normally produced goods because of their large volumes. One jointly produced batch yields 3,000 cubic yards of wood chips and 10,000 cubic yards of sawdust, and the estimated cost per batch is $21,400. However, the joint production of each good is not equally weighted. Management at Carving Creations estimates that for the time it takes to produce 10 cubic yards of wood chips in the joint production process, only 2 cubic yards of sawdust are produced. Given this information, allocate the joint costs of production to each product using the weighted average method.
Luzon Manufacturing Corp. manufactures two products from a joint distilling process. The two products developed are Light Brandy and Primera Brandy. A standard production run incurs costs of P3,000,000 and results in 6,000 units of Light Brandy and 9,000 units of Primera Brandy. Each Light Brandy sells for P200 per unit, and each Primera Brandy sells for P400 per unit. Assuming no further processing work is done after the split-off point, the amount of joint cost allocated to Primera Brandy on a physical quantity allocation basis would be?
The James Company manufactures widgets that sell for $120 each. The company's unit cost for each widget is as follows: A company in another state has offered to purchase 1,000 widgets from James Company at a cost of $90 each. If James were to accept this special order, no additional Fixed Manufacturing Overhead costs would be incurred. Should James accept this special order? Show relevant calculations.
The Coldplay Company is evaluating an option to outsource production of its only product, while it will continue to perform all sales, marketing and administration duties in-house. Coldplay incurs direct materials, direct labor and variable overhead costs of $20 for each unit of product it manufactures. In addition, Coldplay incurs fixed manufacturing overhead costs annually of $1,000,000 and has annual production of 100,000 units. Coldplay has determined that it could avoid all fixed manufacturing costs if it outsources production. Based on a quantitative analysis only of this information, is the following statement true or false? Coldplay should make the decision to outsource production of its only product if a third-party supplier offers to manufacture and sell to Coldplay the product for less than $30 per unit. True or False?
Allison, Inc., produces two products, X and Y, in a single joint process. Last month the joint costs were $75,000 when 10,000 units of Product X and 15,000 units of Product Y were produced. Addi-tional processing costs were $15,000 for Product X and $10,000 for Product Y. Product X sells for $10, and Product Y sells for $5. The joint cost allocations to Products X and Y using the net realizable value method would be: Group of answer choices $42,500 $32,500 $30,000 $45,000 $42,857 $32,143 $45,000 $30,000 none of the above. Flag question: Question 2 Question 23 pts The joint cost allocations to Products X and Y using the physical units method would be: Group of answer choices $30,000 $45,000 $42,500 $32,500 $42,857 $32,143 $45,000 $30,000 none of the above. Flag question: Question 3 Question 33 pts The joint cost allocations to Products X and Y using the constant gross margin percentage method would be: Group of answer choices $42,143…
Two products, TB and ID, emerge from a joint process. Product TB has been allocatedP31,200 of the total joint costs of P48,000. A total of 5,000 units of product TB areproduced from the joint process. Product TB can be sold at the split-off point for P24 perunit, or it can be processed further for an additional total cost of P15,000 and then soldfor P26 per unit. If product TB is processed and sold, what would be the effect on theoverall profit of the company compared with sale in its unprocessed form directly afterthe split-off point?