Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 Dover Studios shot hundreds of hours of footage that cost $48,000,000. From this footage, the company produced two movies: Star World and Star World:

1

Dover Studios shot hundreds of hours of footage that cost $48,000,000. From this footage, the company produced two movies:Star WorldandStar World: The Sequel.The sequel used better sound effects than the original, was significantly more expensive to produce, and was much better received at the box office.

Dover Studios also generated revenue from admissions paid by numerous movie fans who wanted to tour the movie production set. The company accounted for this revenue as a by-product and used it to reduce joint cost before making allocations to the two feature-length movies.

The following information pertains to the two movies:

Products Total Receipts Separate Costs

Star World $24,000,000 $16,320,000

Star World: The Sequel 139,200,000 98,880,000

Studio tours 1,920,000 1,152,000

a.If joint cost is allocated based on net realizable value, how much of the joint cost is allocated to each movie?

Star World $

Star World: The Sequel $

Total $

b.Based on your allocations in (a), how much profit was generated by each movie?

Star World $

Star World: The Sequel $

Total $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I

Volume 1, 6th Edition

1259103250, 978-1259103254, 978-0071339476

More Books

Students also viewed these Accounting questions