A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $13,000. None of the products can be sold at split-off, but must b processed further. Information on one batch of the three products is as follows: Product Gallons 3,400 4,000 2,400 L-Ten Triol Pioze Required: Further Processing Cost per Gallon $0.50 1.00 1.50 Eventual Market Price per Gallon $2.00 5.00 6.00 1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze. 8 Total Revenue Total Costs Total Gross Profit 2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and rou all other computations to the nearest dollar.

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $13,000. None of the products can be sold at split-off, but must b processed further. Information on one batch of the three products is as follows: Product Gallons 3,400 4,000 2,400 L-Ten Triol Pioze Required: Further Processing Cost per Gallon $0.50 1.00 1.50 Eventual Market Price per Gallon $2.00 5.00 6.00 1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze. 8 Total Revenue Total Costs Total Gross Profit 2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and rou all other computations to the nearest dollar.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...

See similar textbooks

Similar questions

Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring 250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows: An assistant in the companys cost accounting department was overheard saying ...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort. Which of the following strategies should be recommended for Oakes?
Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were 50,000, and 14,000 units of overs and 36,000 units of unders were produced. Separable processing costs beyond the split-off point were as follows: overs, 18,000; unders, 23,040. Overs sell for 2.00 per unit; unders sell for 3.14 per unit. Required: 1. Allocate the 50,000 joint costs using the estimated net realizable value method. 2. Suppose that overs could be sold at the split-off point for 1.80 per unit. Should Pacheco sell overs at split-off or process them further? Show supporting computations.
PT Y manufactures three products using the same production process. The costs incurred up to the split-off point are $200,000. The company decided to further process the three products before they were sold. The number of units produced (based on regular sales), the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows. Product D E F Number of Units Produced 4,000 6,000 2,000 Selling Price at Split-Off Additional Processing Costs Selling Price after Processing $25.00 $26.60 $34.40 $14,000 $20,000 $9,000 $30.00 $31.20 $37.60 Instructions 1) Allocate the $200,000 joint cost to product D, E, and F using these methods: a. Physical-measure method (2%) b. NRV method (5%) 2) Which information is relevant to the decision on whether or not to process the products further? (2%). Explain why this information is relevant (2%). 3) Which product(s) should be processed further and which should be sold at…
Breegle Company produces three products (B-40, J-60, and H-102) from a single process.Breegle uses the physical volume method to allocate joint costs of $22,500 per batch to theproducts. Based on the following information, which product(s) should Breegle continue toprocess after the split-off point in order to maximize profit? B-40 J-60 H-102Physical units produced per batch 1,500 2,000 3,200Market value per unit at split-off $10.00 $4.00 $7.25Cost per unit of further processing after split-off $3.05 $1.00 $2.50Market value per unit after further processing $12.25 $5.70 $9.75 a. B-40 onlyb. J-60 only c. H-102 onlyd. B-40 and H-102 only
Stahl Inc. produces three separate products from a common process costing $100,300. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Sales Valueat Split-OffPoint Cost toProcessFurther Sales Valueafter FurtherProcessing Product 10 $59,400 $100,900 $190,100 Product 12 15,000 30,100 34,000 Product 14 55,600 149,400 215,900
Previtz Company produces two products from a joint process: X and Z. Joint Processing Costs for this production costs for this production cycle are P 8,000 Sales Price Disposal Cost Further Final Sale Per Yard at Per yard at Processing Price per Yards Split off Split Off Per Yard Yard X 1,500 P 6.00 3.50 P 1.00 P 7.50 Y 2,200 9.00 5.00 3.00 11.25 If X and Z are processed further, no disposal costs will be incurred or such cost will be borned by the buyer Requirement…
Previtz Company produces two products from a joint process: X and Z. Joint Processing Costs for this production costs for this production cycle are P 8,000 Sales Price Disposal Cost Further Final Sale Per Yard at Per yard at Processing Price per Yards Split off Split Off Per Yard Yard X 1,500 P 6.00 3.50 P 1.00 P 7.50 Y 2,200 9.00 5.00 3.00 11.25 If X and Z are processed further, no disposal costs will be incurred or such cost will be borned by the buyer Requirement…
A Florida processing company, Sunshine ToGo, produces two products from a joint process: Alpha and Omega. Joint processing costs for this month's production cycle are $18,000. Pounds Sales priceper pound atsplit-off Disposalcost perpound atsplit-off Furtherprocessingper pound Final saleprice perpound Alpha 1,260 $7.00 $4.50 $1.50 $ 8.00 Omega 2,940 10.00 6.00 3.50 12.25 If Alpha and Omega are processed further, no disposal costs will be incurred or such costs will be borne by the buyer. Using sales value at split-off, what amount of joint processing cost is allocated to Alpha (round to the nearest dollar)? Group of answer choices $13,846 $4,154 $2,938 $5,400
Breaking Bad Company produces four chemicals from the same process: M1, M2, M3, and M4. Joint product costs are P9,000. (Round all answers to the nearest peso.) Barrels Sales price per barrel at split-off Disposal cost per barrel at split-off Further processing cost Final sales price per barrel M1 750 P10.00 P6.50 P2.00 P13.50 M2 1,000 8.00 4.00 2.50 10.00 M3 1,400 11.00 7.00 4.00 15.50 M4 2,000 15.00 9.50 4.50 19.50 If the company sells the products after processing, the following disposal costs will be incurred: M1, P2.50; M2, P1.00; M3, P3.50; M4, P6.00. Using sales value at split-off, what amount of joint processing cost is allocated to Product M1?
Sheddon Industries produces two products. The products' identified costs are as follows: Product A Product B Direct materials $ Direct labor 20,000 12,000 $ 15,000 24,000 The company's overhead costs of $108,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product B? (Do not round intermediate calculations.) Multiple Choice $7.80 $22.20 $16.80 None of the answers are correct.
A Florida processing company, Sunshine ToGo, produces two products from a joint process: Alpha and Omega. Joint processing costs for this month's production cycle are $9,000. Pounds Sales priceper pound atsplit-off Disposalcost perpound atsplit-off Furtherprocessingper pound Final saleprice perpound Alpha 1,800 $7.00 $4.50 $1.50 $ 8.00 Omega 2,600 10.00 6.00 3.50 12.25 If Alpha and Omega are processed further, no disposal costs will be incurred or such costs will be borne by the buyer. Using a physical measure method, what amount of joint processing cost is allocated to Omega (round to the nearest dollar)? Using sales value at split-off, what amount of joint processing cost is allocated to Alpha (round to the nearest dollar)?
Stahl Inc. produces three separate products from a common process costing $100,800. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Sales Valueat Split-OffPoint Cost toProcessFurther Sales Valueafter FurtherProcessing Product 10 $60,400 $100,600 $190,000 Product 12 15,600 30,100 35,400 Product 14 55,500 150,800 214,500 Determine total net income if all products are sold at the split-off point. Net income $ eTextbook and Media Determine total net income if all products are sold after further processing. Net income $ eTextbook and Media Calculate incremental profit/(loss) and determine which products should be…