All-A-Buzz makes three products from a joint production process using honey. Joint cost for the process...
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All-A-Buzz makes three products from a joint production process using honey. Joint cost for the process for the year is $246,400. Per Unit Incremental Units of Selling Price Processing Final Sales Product Honey butter Output 20,000 at Split-Off Cost Price 4.00 $3.00 $6.00 Honey jam 40,000 Honey syrup 2,000 6.40 3.00 4.00 14.00 0.40 3.60 Each container of honey butter, jam, and syrup, respectively, contains 16 ounces, 8 ounces, and 3 ounces of product. a. Determine which products should be processed beyond the split-off point. Process Further? Honey butter Honey jam Honey syrup b. Assume honey syrup should be treated as a by-product. Allocate the joint cost based on (1) units produced, (2) weight, and (3) sales value at split-off. Use the net realizable value approach, assuming by-product revenues reduce joint production costs. (1) joint cost allocated based on units produced Honey butter $ Honey jam Total $ (2) joint cost allocated based on weight (2) joint cost allocated based on weight Honey butter $ Honey jam Total $ (3) joint cost allocated based on sales value at split-off Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar. Honey butter $ Honey jam Total $ All-A-Buzz makes three products from a joint production process using honey. Joint cost for the process for the year is $246,400. Per Unit Incremental Units of Selling Price Processing Final Sales Product Honey butter Output 20,000 at Split-Off Cost Price 4.00 $3.00 $6.00 Honey jam 40,000 Honey syrup 2,000 6.40 3.00 4.00 14.00 0.40 3.60 Each container of honey butter, jam, and syrup, respectively, contains 16 ounces, 8 ounces, and 3 ounces of product. a. Determine which products should be processed beyond the split-off point. Process Further? Honey butter Honey jam Honey syrup b. Assume honey syrup should be treated as a by-product. Allocate the joint cost based on (1) units produced, (2) weight, and (3) sales value at split-off. Use the net realizable value approach, assuming by-product revenues reduce joint production costs. (1) joint cost allocated based on units produced Honey butter $ Honey jam Total $ (2) joint cost allocated based on weight (2) joint cost allocated based on weight Honey butter $ Honey jam Total $ (3) joint cost allocated based on sales value at split-off Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar. Honey butter $ Honey jam Total $
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