Question : 51) For each of the following methods of allocating joint : 1217003

 

51) For each of the following methods of allocating joint costs, give a positive or a negative aspect of selecting each one to allocate joint costs.

a.sales value at splitoff

b.estimated net realizable value method

c.the constant gross margin method

d.a physical measure such as volume

52) Sugar Cane Company processes sugar cane into three products. During May, the joint costs of processing were $240,000. Production and sales value information for the month were as follows:

 

Product

Units Produced

Sales Value at Splitoff Point

Separable costs

Sugar

6,000

$80,000

$24,000

Sugar Syrup

4,000

70,000

64,000

Fructose Syrup

2,000

50,000

32,000

 

Required:

Determine the amount of joint cost allocated to each product if the sales value at splitoff method is used.

53) Calamata Corporation processes a single material into three separate products A, B, and C.  During September, the joint costs of processing were $300,000.  Production and sales value information for the month were as follows:

 

Product

Units Produced

Final Sales Value per Unit

Separable Costs

             A

10,000

$25

$125,000

             B

15,000

30

  250,000

             C

12,500

24

  125,000

 

Required:

Determine the amount of joint cost allocated to each product if the constant gross-margin percentage NRV method is used.

 

 

 

54) Oregon Lumber processes timber into four products. During January, the joint costs of processing were $280,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:

 

 

 

Sales Value at

Product

Board feet

Splitoff Point

Ending Inventory

2 x 4’s

6,000,000

$0.30 per board foot

500,000 bdft.

2 x 6’s

3,000,000

0.40 per board foot

250,000 bdft.

4 x 4’s

2,000,000

0.45 per board foot

100,000 bdft.

Slabs

1,000,000

0.10 per board foot

50,000 bdft.

 

Required:

Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to 3 decimal places when necessary.

 

55) Zenon Chemical, Inc., processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $240,000. Production and sales value information for the month is as follows:

 

Product

Units Produced

Sales Value at Splitoff Point

Turpentine

6,000 liters

$60,000

Paint thinner

6,000 liters

50,000

Spot remover

3,000 liters

25,000

 

Required:

Determine the amount of joint cost allocated to each product if the physical-measure method is used.

 

56) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X5, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:

 

Product

Cases

Sales Value at Splitoff Point

Separable Costs

Selling Price

Catsup

100,000

$6 per case

$3.00 per case

$28 per case

Juice

150,000

8 per case

5.00 per case

25 per case

Canned

200,000

5 per case

2.50 per case

10 per case

 

Required:

Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.