Sh5 A company manufactures three products using the same production process. The costs incurred up to thesplit-off point are $188,000. These costs are allocated to the products on the basis of their sales value at thesplit-off point. The number of units produced, the selling prices per unit of the three products at the split-offpoint and after further processing, and the additional processing costs are as follow:ProductX(a)YZNumber ofUnitsProduced4,7009,4003,760Selling Priceat Split-off$11.0011.9019.70Selling PriceafterProcessing$16.0016.5021.90should be processed further butAdditionalProcessingCosts$13,16019,74011,280Which product(s) should be processed further and which should be sold at the split-off point?should be sold at the split-of

Incremental sales revenue Product X Product Y Product Z Sales per unit after processing $…

point and after further processing, and Product X Y Z Number of Units Produced 4,700 9,400 3,760 Selling Price at Split-off $11.00 11.90 19.70 Selling Price after Processing $16.00 16.50 21.90 Additional Processing Costs $13,160 19,740 11,280

point and after further processing, and Product X Y Z Number of Units Produced 4,700 9,400 3,760 Selling Price at Split-off $11.00 11.90 19.70 Selling Price after Processing $16.00 16.50 21.90 Additional Processing Costs $13,160 19,740 11,280

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 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...

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Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs 12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows: Required: 1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. (Round the percentages to four significant digits. Round all cost allocations to the nearest dollar.) 2. What if it cost 2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products?
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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?
Rex Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are: What is the activity rate for each cost pool?
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? a. B-40 only b. J-60 only c. H-102 only d. B-40 and H-102 only
Rocks Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are: Â What is the activity rate for each cost pool?
LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of Product Y, and 1,000 units of Product Z is $50,000. The unit sales values of the three products at the split-off point are Product X–$30, Product Y–$100, and Product Z–$90. Ending inventories include 200 units of Product X, 300 units of Product Y, and 100 units of Product Z. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their sales values at split-off. Assume that Product Z can be sold for $120 a unit if it is processed after split-off at a cost of $10 a unit. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their net realizable values.
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?
CARAMEL Inc. manufactures three joint products. The following production data were provided by CARAMEL Inc. for the current period: Product Name Units Produced X Y Z Joint product costs for the current period were as follows: Raw materials Direct labor Factory overhead Costs before separation Costs after separation: X 1,000 2,000 3,000 The company uses the net realizable value method for allocating joint costs. 8. What is the Gross profit/(loss) on the sale of all X products? Y Z Production for April, in pounds: Z Additional Processing Final Selling Price Cost after Split Off 9. What is the total gross profit (loss) on the sale of all the joint products? MACCHIATO Company produces two main products jointly. X and Y. and Z. which is a by- product of Y. X and Y are produced from the same raw material. Z is manufactured from the residue of the process creating Y. Sales for April: Costs before separation are apportioned between the two main products by the net realizable value method. The…
MIX Inc. is conducting a joint process which results to three products. The following production data were provided by MIX Inc. for the current period:Product Name Units Produced Selling price per unit at split off pointAce 10,000 P40Bat 15,000 P20Can 25,000 P12Additional data for the period were provided:All the ace items were sold for a gross profit of P100,000.The joint costs were allocated using physical method.Requirement:1. What is the gross profit/(loss) if all the Bat items are sold in current year?2. Assuming the joint costs are fixed, what is the joint cost allocated to can items using the relative sales value method?
ats Assume a company has three products-A, B, and C-that emerge from a joint process. The joint processing costs that are incurred up to the split-off point equal $1,200,000. The selling prices and outputs for each product at the split-off point are as follows: Product A B С Selling Price $33 per pound $29 per pound $24 per pound Product A B C Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows: Output 14,000 pounds 18,000 pounds 19,000 pounds Additional Processing Costs $65,000 $72,000 $88,000 Selling Price $37 per pound $34 per pound $30 per pound The company is trying to decide whether to retain or discontinue the entire joint manufacturing process. What is the financial advantage (disadvantage) of continuing to operate the entire joint manufacturing process?