Question
CH9-Q7-A) Chris owns a small sheet metal business. He produces three different types of sheet metal. Their sizes are similar, but they have different degrees
CH9-Q7-A)
Chris owns a small sheet metal business. He produces three different types of sheet metal. Their sizes are similar, but they have different degrees of flexibility. Costs are allocated based on the sales value at split-off point method. Additional information for March production follows:
| Very | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Stiff | Flexible | Flexible | Total | ||||||
| Units produced | 103,000 | 83,000 | 18,000 | 204,000 | |||||
| Joint costs | ? | ? | ? | $957,000 | |||||
| Sales value at split-off point | $810,000 | $555,000 | $135,000 | $1,500,000 | |||||
| Additional cost if processed further | $95,000 | $28,000 | $13,000 | $136,000 | |||||
| Sales value if processed further | $1,003,000 | $523,000 | $151,000 | $1,677,000 |
REQUIRED:
Assuming that the 18,000 units of Very Flexible were processed further and sold, what would be the gross margin on this sale?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting concepts and applications
Authors: Albrecht Stice, Stice Swain
11th Edition
978-0538750196, 538745487, 538750197, 978-0538745482
