Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 29P
Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces HTP–3, a chemical used in hot tubs and swimming pools; PST–4, a chemical used in pesticides; and RJ–5, a product that is sold to fertilizer manufacturers. Biondi uses the net-realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi’s operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $1,700,000 in the manufacture of HTP–3, PST–4, and RJ–5.
Required:
- 1. Determine Biondi Industries’ allocation of joint production costs for the month of October. (Carry calculation of relative proportions to four decimal places.)
- 2. Determine the dollar values of the finished-goods inventories for HTP–3, PST–4, and RJ–5 as of October 31. (Round the cost per gallon to the nearest cent.)
- 3. Suppose Biondi Industries has a new opportunity to sell PST–4 at the split-off point for $3.80 per gallon. Prepare an analysis showing whether the company should sell PST–4 at the split-off point or continue to process this product further.
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Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used
by Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical
used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net-
realizable-value method to allocate joint production costs. The ratio of output quantities to input
quantities of direct material used in the joint process remains consistent from month to month.
Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi's operations for the month of October are as follows. During this month,
Biondi incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ-
5.
Finished goods inventor in
October sales in gallons
October production in gallons
Additional processing costs
Final sales value per gallon
Problem 17-29 Part 2
HTP-3
PST-4
RJ-5
ons (October 1)
Value of inventory
HTP-3
PST-4…
Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by
Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in
pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net-realizable-value
method to allocate joint production costs. The ratio of output quantities to input quantities of direct
material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO
(first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi
incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ-5.
Finished goods inventory in gallons (October 1)
October sales in gallons
October production in gallons
Additional processing costs
Final sales value per gallon
Problem 17-29 Part 2
HTP-3
PST-4
RJ-5
Value of inventory
HTP-3…
Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces
HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that
is sold to fertilizer manufacturers. Biondi uses the net-realizable-value method to allocate joint production costs. The ratio
of output quantities to input quantities of direct material used in the joint process remains consistent from month to month.
Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories.
Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint
production costs of $2,550,000 in the manufacture of HTP-3, PST–4, and RJ-5.
Finished goods inventory in gallons (October 1)
October sales in gallons
October production in gallons
Additional processing costs
Final sales value per gallon
Problem 17-29 Part 1
HTP-3
PST-4
RJ-5
Joint Products
HTP-3
26,500…
Chapter 17 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQCh. 17 - Why does dual cost allocation improve the...Ch. 17 - What potential behavioral problem can result when...Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Explain the difference between two-stage...Ch. 17 - Define the following terms: joint production...Ch. 17 - Prob. 10RQ
Ch. 17 - Describe the relative-sales-value method of joint...Ch. 17 - Define the term net realizable value, and explain...Ch. 17 - Are joint cost allocations useful? If they are,...Ch. 17 - For what purpose should the managerial accountant...Ch. 17 - Prob. 15ECh. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Tuscaloosa National Bank has two service...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Breakfasttime Cereal Company manufactures two...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Refer to the data given in Exercise 1720....Ch. 17 - Prob. 23ECh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Celestial Artistry Company is developing...Ch. 17 - Snake River Sawmill manufactures two lumber...Ch. 17 - Travelcraft Company manufactures a complete line...Ch. 17 - Biondi Industries is a manufacturer of chemicals...Ch. 17 - Berger Company manufactures products Delta, Kappa,...Ch. 17 - Prob. 31PCh. 17 - Lafayette Company manufactures two products out of...Ch. 17 - Refer to the data given in Problem 1726 for...Ch. 17 - Prob. 34PCh. 17 - Top Quality Fruit Company, based on Oahu, grows,...Ch. 17 - Prob. 36C
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