Question
Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost = $80,000). Five thousand pounds of Nuts can be sold at split-off for $20
Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost = $80,000). Five thousand pounds of Nuts can be sold at split-off for $20 per pound; ten thousand pounds of Bolts can be sold at split-off for $15 per pound. For product costing purposes Cheyenne allocates joint costs using the relative sales value method. The amount of joint cost allocated to Bolts would be:
Multiple Choice
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$32,000.
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$40,000.
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$48,000.
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$60,000.
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$80,000.
Hsu Company manufactures two products (A and B) from a joint process that cost $200,000 for the year just ended. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Further information follows.
If Processed Further | |||||||||||
Product | Pounds Produced | Per-Pound Sales Price | Sales Value | Separable Cost | |||||||
A | 20,000 | $ | 12 | $ | 350,000 | $ | 90,000 | ||||
B | 30,000 | 8 | 300,000 | 60,000 | |||||||
If the joint costs are allocated based on the physical-units method, the amount of joint cost assigned to product A would be:
Multiple Choice
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$80,000.
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$100,000.
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$104,000.
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$120,000.
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None of the answers is correct.
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