Question
Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $470,000 for a standard
Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $470,000 for a standard production run that generates 110,000 pints of Smooth Skin and 190,000 pints of Silken Skin. Smooth Skin sells for $3.50 per pint, while Silken Skin sells for $5.10 per pint.
Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method? 2. If no separable costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin using the physical measure method? 3. If separable processing costs beyond the split-off point are $1.30 per pint for Smooth Skin and $1.80 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin using a net realizable value method? 4. If separable processing costs beyond the split-off point are $1.30 per pint for Smooth Skin and $1.80 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Smooth Skin using a physical measure method?
(For all requirements, do not round intermediate calculations. Round final answers to nearest whole dollar amounts.)
\begin{tabular}{|l|l|} \hline 1. & Relative sales value method - Smooth Skin \\ \hline 2. & Physical measure method - Silken Skin \\ \hline 3. & Net realizable value method - Silken Skin \\ \hline 4. & Physical measure method - Smooth Skin \\ \hline \end{tabular}
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