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Exercise 11-52 (Algo) Physical Quantities Method; Sell or Process Further (LO 11-3, 4) Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a
Exercise 11-52 (Algo) Physical Quantities Method; Sell or Process Further (LO 11-3, 4) Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, Joint product costs were $240,500. Additional information follows: Product FP-10 FP-20 25 FP-40 Units Produced 81,000 121,500 Sales Values $171,750 67,500 309,250 84,500 Processing Costs (After) Split-Off) $ 28,500 108,500 24,500 The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 67,500 units produced. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, in case the disposal cost for FP-40 increases to $150,000 for every 67,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words. It will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, In case the disposal cost for FP-40 increases to $150,000 for every 67,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP- 10 and FP-20. What joint costs would be allocated to FP-10 and FP-207 Joint costs allocated FP-10 FP-20 Required: o. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further. In case the disposal cost for FP-40 increases to $150,000 for every 67,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? Indifference point FP-10 FP-20 < Required A Required C > ok nt ences Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20? b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further. in case the disposal cost for FP-40 increases to $150,000 for every 67,500 units of FP-40 produced? Complete this question by entering your answers in the tabs below. Required A Required B Required C At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, in case the disposal cost for FP-40 increases to $150,000 for every 67,500 units of FP-40 produced? Indifference point FP-10 FP-20
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