Analyzing Joint and by-product data with standard costs Haverly Company makes two chemical solvents used in the production of cleaning compounds. The products are manufactured in a joint production process which also yields a by-product. The standard costs of the two joint products are:

The by-product sells for $2 per pound. On the average, 3 pounds of by-product are produced per barrel of main product. Joint costs are 60 percent of the total main-product costs. The physical units method is used to allocate joint costs. The two joint products are priced at 40 percent above standard product cost. In a typical month the company produces 4,000 barrels of Solvene and 6,000 barrels of Solvette.

Transcribed Image Text:

Standards per Barrel Solvene Solvette Direct materials ... $18.00 $22.00 Direct labor ... 14.00 16.00 Manufacturing overhead. 10.00 12.00 Totals .... $42.00 $50.00