If Product A is processed beyond the split-off point, profit will:
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Cledus and Bandit, LLC is a small production facility in Foley, Alabama that produces three products in a joint
|
Product |
Sales Value
at Split-off |
Separable Processing
Costs after Split-off |
Sales Value at Completion |
|
A
|
$12
|
$9
|
$21
|
|
B
|
10
|
4
|
17
|
|
C
|
15
|
6
|
19
|
If Product A is processed beyond the split-off point, profit will:
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- Vishnu2. Joint product costing 17 Flora Perfume Company manufactures two perfume products in a joint process. In July, raw materials costing $50,000 were processed at a conversion cost of $80,000. The joint process resulted in 10 litres of product A and 15 litres of product B. Product A can be sold for $2 per millilitres, and product B can be sold for $1.5 per millilitres. Management generally processes each of these chemicals further in separable processes to produce more refined perfume products. Product A is processed separately at a cost of $0.5 per millilitres. The resulting product, product X sells for $5 per millilitres. Product B is processed separately at a cost of $0.75 per millilitres. The resulting product, product Y, sells for $3 per millilitres. Required: Allocate the company's joint production costs for July using: a. The physical unit method b. The relative-sales-value method. c. The net-realizable-value methodA company processes raw material into Products R, B, T and D. Products R, B and T are joint products and D is classified as a by-product. In process 1, 50 000 kg of material will be processed at a cost of R220 600 worth of material, R40 500 labour and R24 500 overheads. After the basic processing in process 1, thirty percent of the input is transferred to process B. In Process B additional costs of R25 400 are incurred and product B (from process B) can then be sold for R28 per kg. They transfer 60% of the original material input (from process 1) to process 2 and then the remainder to Process D. The products in process D are considered a by-product (By-product D) and have a sales price of R6 per kilogram. The cost involved with the selling of the by-product is R7 000 in total. The business account for this by crediting the net market value of by-products produced to the general production costs. In process 2 the materials processed further at a cost of R21 200. They then…
- RelyaTech Corporation makes two products, Light and Heavy. These two products emerge from a joint process. Product Light has been allocated $19,300 of the total joint costs of $40,000. A total of 2,600 units of product Light are produced from the joint process. (ID#62183) Product Light can be sold at the split-off point for $13 per unit, or it can be processed further for an additional total cost of $10,600 and then sold for $15 per unit Q) If product Light is processed further and sold, what would be the financial advantage (disadvantage) for RelyaTech Corporation compared with sale in its unprocessed form directly after the split-off point? Multiple Choice ($13,900) ($27300) $(5,400) $28,400 Help Save & ExitCorporation manufactures three products from a joint process. The three products 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 process is as follows: Product 1 Product 2 Product 3 Sales Price at split-off point $16 $12 $5 Allocated joint costs $6,000 $6,000 $6,000 Sales Price after further processing $20 $18 $14 Cost of further processing $6,360 $1,420 $2,650 Product Quantity 1,000 lb. 1,000 lb. 1,000 Ib. Q. What would be the additional amount of profit that Corp. would gain from further processing the product(s) that is/are more profitable to process further rather than be sold at the split-off point?Barrett Chemicals manufactures four chemicals, Chem-1, Chem-2, Chem-3, and Chem-4, from a joint process. The total joint costs in May were $564,000. Additional information follows: Product Units Produced Sales Value at Split-Off If Processed Further Additional Costs Sales Values Chem-1 302,000 $ 234,000 $ 34,100 $ 274,000 Chem-2 190,000 278,000 30,800 304,000 Chem-3 206,000 163,600 26,300 194,000 Chem-4 158,000 260,400 27,700 284,000 856,000 $ 936,000 $ 118,900 $ 1,056,000 Required: Barrett Chemicals uses the net realizable value method to allocate joint costs. What joint costs would be allocated to each product in May? Note: Round percentages to 2 decimals. Round your final answers to the nearest whole dollar amounts.
- A joint production process at the Company results in two products, cherry jelly and cherry jam. The following cost and activity data relate to these two products: Cherry jelly Cherry jam Joint costs allocated $10,000 $12,000 Number of units produced from joint process 2100 2100 Selling price at split-off point $2.70 $1.75 Selling price after processing further $5.00 $2.00 Cost of processing further $2400 $2,000 Cherry jelly can be sold as-is (at the split-off point) for $2.70 per unit, or it can be processed further into a specialty cherry smoothie and then sold for $5.00 per unit. If cherry jelly is processed further into the specialty cherry smoothie, what would be the overall effect on operating income? $2430 net increase in operating income $2430 net decrease in operating income $5670 net increase in operating income $5670 net decrease in operating incomeTango Company produces joint products M, N, and T from a joint process. This information concerns a batch produced in April at a joint cost of $190,000: Product M N T Units Produced and Sold 17,000 11,000 12,000 Product M N T Allocated Joint Cost After Split-Off Total Separable Costs $ 18,800 16,400 3,800 Total Final Sales. Value Required: How much of the joint cost should be allocated to each joint product using the net realizable value method? (Do not round intermediate calculations. Enter your final answers in whole dollars.) $ 230,000 210,000 39,000Crane's woodworking business produces two products from its joint process: one main product (sanded and finished trim pieces) and one by-product (sawdust/shavings). The joint process has a cost of $31,000, which results in trim pieces worth $47,000 and sawdust/shavings that can be sold for $2,800. If Crane uses the production method to account for by-products, determine how much of the joint process cost will be allocated to each product. In other words, how much inventory cost will be recorded for each product? Main product By-product Allocated joint costs $
- Joint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch. Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places. Joint Product Allocation Washed $ Stained Pressure treated Totals $ne bThe Vancouver Company, using a process system, manufacture work boots, its main product, and wallets, its by-product. They both emerge at the split-off point from Department 1. The work boots require no additional processing. The wallets are transferred in a ratio of 5:1. Sales of the main product to the by-product had this same ratio: 2,000 pairs of boots and 400 wallets were produced and sold during the period. The boots are sold for P1,000 a pair and the wallets for P100 a piece. Total production costs were P1,200,000 for Department 1 and 750,000 for Department 2. Total selling and administrative expenses for the main product and by-product were 10% and 2%, respectively, of their sales revenue. The Vancouver Company expects a 30% gross profit from its by-products. Required: 1. Prepare an income statement using the a. Net realizable value method b. Reversal cost methodJoint cost allocation — physical units method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 50 washed boards, 40 stained boards, and 10 pressure treated boards. The joint production process costs a total of $800 per batch. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Using the physical units method, allocate the joint production cost to each product. Round your answers to the nearest cent. Joint Product Allocation Washed $fill in the blank 2 Stained fill in the blank 3 Pressure treated fill in the blank 4 Totals $fill in the blank 5
