Question
Company manufactures two products, A and B from a joint process. It costs the company 800,000 in a joint process to product 1,000 units of
Company manufactures two products, A and B from a joint process. It costs the company 800,000 in a joint process to product 1,000 units of A and 5,000 units of B. Both of the products can be sold at the split-off point or they can be processed further to completion. To process further the company incurs separable costs of $81 per units for A, and $35 for units of B. A and B can be sold for $100, and $200 respectively at completion.
What is the amount of total costs assigned to the two products assuming joint costs are allocated using physical units method?
What is the amount of joint costs assigned to products assuming joint costs are allocated using final sales value method?
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