Required: i. Determine the total unit cost of each product line in a refined state. ii. Which of the three product lines, if any, should be refined and which should be sold after the basic processing operation? Show computations.
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Moper Corporation manufactures three identifiable product lines, Products A, B, and C, from a basic processing operation. The cost of the basic operation is $320,000 for a yield of 5,000 tons of Product A; 2,000 tons of Product B; and 1,000 tons of Product C. The basic
Moper Corporation does both the basic processing work and the further
refinement of the three product lines. After the basic operation, the products can be sold at the following prices per metric ton:
Product A—$60
Product B—$53
Product C—$35
Costs to refine each of the three product lines follow:
| A | B | C | |
| Variable cost per metric ton | $8 | $7 | $4 |
| Total fixed cost | $20,000 | $16,000 | $6,000 |
The fixed cost of the refining operation will not be incurred if the product line is not refined. The refined products can be sold at the following prices per metric ton:
Product A—$75
Product B—$65
Product C—$40
Required:
i. Determine the total unit cost of each product line in a refined state.
ii. Which of the three product lines, if any, should be refined and which should be sold after the basic processing operation? Show computations.
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- Pharoah Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $181,000 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Spock Uhura Sulu Sales Value at Split-Off Point $209,200 300,900 455,600 Allocated Joint Costs Incremental profit (loss) $ $39,600 60,700 80,700 Cost to Process Further Spock $109,700 85,000 250,700 Sales Value of Processed Product the cold as is $299,000 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 401,000 799,400 Uhura processed further $ SuluCrane Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $179,800 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Spock Uhura Sulu Incremental profit (loss) Sales Value at Split-Off Point Spock Uhura $209,700 Sulu 300,900 454,100 Save for Later $ Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) sold as is Allocated Joint Costs $39.700 60,700 79,400 Spock process further Cost to Process Further $110,400 process further 85,100 249,700 $ Sales Value of Processed Product Indicate whether each of the…Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $178,600 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Sales Value atSplit-Off Point AllocatedJoint Costs Cost to ProcessFurther Sales Value ofProcessed Product Spock $209,500 $39,200 $110,100 $300,900 Uhura 299,900 59,100 85,100 400,900 Sulu 454,000 80,300 249,500 800,700 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Spock Uhura Sulu…
- Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $178,800 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Spock Uhura Sulu Sales Value at Split-Off Point $211,000 299,200 455,600 Allocated Joint Costs Incremental profit (loss) $ $39,700 59,800 79,300 Cost to Process Further $110,800 Spock 85,200 250,000 Sales Value of Processed Product $300,100 400,200 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 800,800 Uhura SuluKirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $179,400 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Sales Value atSplit-Off Point AllocatedJoint Costs Cost to ProcessFurther Sales Value ofProcessed Product Spock $209,700 $40,000 $109,600 $300,900 Uhura 300,000 60,200 84,900 399,900 Sulu 455,500 79,200 249,500 800,500 Determine the incremental profit or loss that each of the three joint products. Spock Uhura Sulu Incremental profit (loss) $ $ $ Indicate whether each of the three joint products should be sold as…Pharoah Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $182,100 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Spock Uhura Sulu Sales Value at Split-Off Point $209,600 299,800 455,800 Allocated Joint Costs $40,200 60,900 81,000 Cost to Process Further $109,700 84,700 250,200 Sales Value of Processed Product $300,900 400,600 799,600 Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45))
- Webster Company produces 30,000 units of product A, 24,000 units of product B, and 16,000 units of product C from the same manufacturing process at a cost of $400,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $30 for A, $25 for B, and $1 for C. None of the products requires separable processing. Of the units produced, Webster Company sells 23,000 units of A, 23,000 units of B, and 16,000 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?Webster Company produces 25,000 units of product A, 15,000 units of product B, and 17,500 units of product C from the same manufacturing process at a cost of $415,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $35 for A, $25 for B, and $2 for C. None of the products requires separable processing. Of the units produced, Webster Company sells 18,000 units of A, 14,000 units of B, and 17,500 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the value of the ending inventory of product A? (Do not round intermediate calculations.) Ending inventoryLawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 26,000 pounds of Alpha at a total cost of $102,000. The output of the process consisted of 30,150 units of product X, 36,850 units of product Y, and 7,400 units of by-product Z. By-product Z can be sold for $10,800. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y?
- A 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…Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 23,000 pounds of Alpha at a total cost of $99,000. The output of the process consisted of 28,800 units of product X, 35,200 units of product Y, and 7,100 units of by-product Z. By-product Z can be sold for $12,000. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y? Product X Product Y Joint CostsFranklin Manufacturing Company has two divisions, X and Y. Division X prepares the steel for processing. Division Y processes the steel into the final product. No inventories exist in either division at the beginning or end of the year. During the year, Division X prepared 80,000 pounds of steel at a cost of $800,000. All the steel was transferred to Division Y where additional operating costs of $5 per pound were incurred. The transfer price for the steel has been $8 per pound for the past five years. The final product was sold for $3,000,000. Currently, Division X sales are entirely to Division Y. However, the manager of Division X has been exploring sales to outside organizations as a means to boost the division’s operating income. Based on negotiations so far, the manager believes contracts for 100,000 pounds of steel could be secured, for the next fiscal year, at a selling price of $21 per pound. Required: As the manager of Division Y, what transfer price would you advocate for…
