Products Pounds sold Pounds on hand at June 30 Sales revenues B 19,000 51,000 $ 4,650 $274,500 $ 379,500 61,000 69,000 40,000 Departments Raw material cost $ 167,000 $ 75,000 29,000 94,000 284,500 31,800 109,000 Direct labor cost Manufacturing overhead Required: a. Determine the following amounts for each product (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, June 30. b. Assume that the entire output of product A could be processed further at an additional cost of $5.80 per pound and then sold for $12.60 per pound. Compute the incremental income from further processing A. c. Considering the results of part b, should the company process product A further? Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, June 30. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) Estimated Net Cost of Goods Sold Ending Inventory Product Realizable Values Joint Costs Product A Product B Product C Total 24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three products appear. Product A is sold at the split-off point with no further processing. Products B and C require further processing before they are sold. Product B is processed in Department Y, and product C is processed in Department Z. The company uses the estimated net realizable value method of allocating joint production costs. Following is a summary of costs and other data for the quarter ended June 30.

No inventories were on hand at the beginning of the quarter. No raw material was on hand at June 30. All units on hand at the end of the quarter were fully complete as to processing.

Products
A
C
19,000
51,000
$ 44,650 $ 274,500 $ 379,500
69,000
40,000
Pounds sold
61,000
Pounds on hand at June 30
Sales revenues
Departments
Raw material cost
$ 167,000 $
75,000
29,000
94,000
31,800
$
284,500
109,000
Direct labor cost
Manufacturing overhead
Required:
a. Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint costs allocated to each of the three products, (3) cost of goods sold, and (4) finished
goods inventory costs, June 30.
b. Assume that the entire output of product A could be processed further at an additional cost of $5.80 per pound and then sold for $12.60 per pound. Compute the incremental income from further processing A.
c. Considering the results of part b, should the company process product A further?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
Determine the following amounts for each product: (1) estimated net realizable value used for allocating joint costs, (2) joint
costs allocated to each of the three products, (3) cost of goods sold, and (4) finished goods inventory costs, June 30. (Do not
round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)
Estimated Net
Cost of Goods
Ending
Inventory
Product
Realizable
Joint Costs
Sold
Values
Product A
Product B
Product C
Total
2$
$
$
$

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