Joint Product Cost AllocationMarket Value Method; By-Product Cost AllocationMarket Value (Reversal Cost) Method. Alba Company manufactures joint
Question:
Joint Product Cost Allocation—Market Value Method; By-Product Cost Allocation—Market Value (Reversal Cost) Method. Alba Company manufactures joint products X and Y as well as by-product Z. Cumulative joint cost data’ for the period show $204,000, representing 20,000 completed units processed through the Refining Department at an average cost of $10.20. Costs are assigned to X and Y by the market value method, which considers further processing costs in subsequent operations. To determine the cost allocation to Z, the market value (reversal cost) method is used. Additional data: LO5 Z X Y Quantityprocessed.
Sales price perunit.
Further processing cost perunit.
Marketing and administrative expenses per unit Operating profit perunit.
2,000 units 8,000 units $6 $20 2 5 1 —
1 —
Required: Compute the joint cost allocated to Z, then the amount to X and Y.
10,000 units $257
Step by Step Answer:
Cost Accounting
ISBN: 9780538828079
11th Edition
Authors: Lawrence H. Hammer, William K. Carter, Milton F. Usry