1) Davis Company produces three products: A, B, and C from the same process. Joint costs for this production run are $2,100.

	Pounds	Sales price per lb. at split-off	Disposal cost per lb. at split-off	Further processing per pound	Final sales price per pound
A	800	$6.50	$3.00	$2.00	$ 7.50
B	1,100	8.25	4.20	3.00	10.00
C	1,500	8.00	4.00	3.50	10.50

If the products are processed further, Davis Company will incur the following disposal costs upon sale: A, $3.00; B, $2.00; and C, $1.00. Refer to Davis Company. Using a physical measurement method, what amount of joint processing cost is allocated to Product B (round to the nearest dollar)? Answer

$494

$679

$927

$700

2) Melbourne Company Melbourne Company manufactures three products in a joint process which costs $25,000. Each product can be sold at split-off or processed further and then sold. 10,000 units of each product are manufactured. The following information is available for the three products:

Product	Sales Value at Split-off	Separable Processing Costs after Split-off	Sales Value at Completion
A	$12	$9	$21
B	10	4	17
C	15	6	19

Refer to Melbourne Company. If Product A is processed beyond the split-off point, profit will:

Answer

		increase by $210,000
		increase by $120,000
		increase by $ 90,000
		remain unchanged

3) Sun Glo Company Sun Glo Company produces three products from the same process that has joint processing costs of $4,100. Products R, S, and T are produced in the following quantities: 250 gallons, 400 gallons, and 750 gallons. Sun Glo Company also incurred advertising costs of $60,000. The ad was used to run sales for all three products. The three products occupy floor space in the following ratio: 5:4:9. (Round all answers to the nearest dollar.) Refer to Sun Glo Company. Using gallons as the physical measurement, what amount of joint processing cost is allocated to Product T?

Answer

		$2,196
		$732
		$1,367
		$1,171