Question
Cole Company manufactures two shampoos, Hi-Volume and Super Shiny, out of a joint production process. The joint (common) costs incurred are $180,000 for a standard
Cole Company manufactures two shampoos, Hi-Volume and Super Shiny, out of a joint production process. The joint (common) costs incurred are $180,000 for a standard production run that generates 75,000 gallons of Hi-Volume and 50,000 gallons of Super Shiny. Hi-Volume sells for $5 per gallon, and Super Shiny sells for $8 per gallon. Additional processing costs beyond the split-off point are $2 per gallon for Hi-Volume and $4 per gallon for Super Shiny and final sales prices are $8 for Hi-Volume and $15 for Super Shiny.Use the physical measure allocation method and the sales price and NRV monetary allocation methods to allocate joint costs. (Round percentages to whole numbers in your calculations to get my check figures.)
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