IX. (CMA, adapted)ZOOMX Corporation is a chemical manufacturer that produces two main products (Zoomx I and Zoomx II) and a by-product (Slowx) from a joint process. If Zoomx had the proper facilities, it could process Slowx further into a main product. The ratio of output quantities to input quantities of direct material used in a joint process remains consistent with the processing conditions and activity level. + Zoomx currently uses the physical method of allocating the joint costs to the main products. The FIFO (first in first out) inventory method is used to value the main products. The by-product is inventoried at its net realizable value, and the net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Jim Simpson, Zoomx's controller, wants to implement the relative sales value method of joint cost allocation. He believes that inventoriable costs should be based on each product's ability to contribute to the recovery of joint production costs. The net realizable value of the by-product would be treated in the same manner as with the physical method. + Data regarding Zoomx's operations for November, 20x6 are presented on the joint cost of production amounted to $2,640,000 for Main Products Zoom 11 By-Product Slow x Zoom ! Finished goods Inventory in gallons on Nov 1, 20x6 November sales in Gallons November production In gallons Sales value per Gallon at split-off Point Additional processing Costs after split-off Final sales value per gallon 20,000 800,000 900,000 $2.00 $1,800,000 $5.00 40,000 700,000 720,000 $1.50 $720,000 $4.00 10,000+ 200,000 250,000 $.55* Disposal and selling costs of $.05 per gallon will be incurred in order to sell the by-product. + REQUIRED: Determine the following if both main products are further processed: 1. The relevant revenue per unit for Zoomx 2. The relevant revenue per unit for Zoomx || 3. The relevant cost per unit for Zoomx 4. The relevant cost per unit for Zoomx 11 5. The relevant margin per unit for Zoomx 14 6. The relevant margin per unit for Zoomx 11 4 7. Which products should be further processed and why? IX. (CMA, adapted)ZOOMX Corporation is a chemical manufacturer that produces two main products (Zoomx I and Zoomx II) and a by-product (Slowx) from a joint process. If Zoomx had the proper facilities, it could process Slowx further into a main product. The ratio of output quantities to input quantities of direct material used in a joint process remains consistent with the processing conditions and activity level. + Zoomx currently uses the physical method of allocating the joint costs to the main products. The FIFO (first in first out) inventory method is used to value the main products. The by-product is inventoried at its net realizable value, and the net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Jim Simpson, Zoomx's controller, wants to implement the relative sales value method of joint cost allocation. He believes that inventoriable costs should be based on each product's ability to contribute to the recovery of joint production costs. The net realizable value of the by-product would be treated in the same manner as with the physical method. + Data regarding Zoomx's operations for November, 20x6 are presented on the joint cost of production amounted to $2,640,000 for Main Products Zoom 11 By-Product Slow x Zoom ! Finished goods Inventory in gallons on Nov 1, 20x6 November sales in Gallons November production In gallons Sales value per Gallon at split-off Point Additional processing Costs after split-off Final sales value per gallon 20,000 800,000 900,000 $2.00 $1,800,000 $5.00 40,000 700,000 720,000 $1.50 $720,000 $4.00 10,000+ 200,000 250,000 $.55* Disposal and selling costs of $.05 per gallon will be incurred in order to sell the by-product. + REQUIRED: Determine the following if both main products are further processed: 1. The relevant revenue per unit for Zoomx 2. The relevant revenue per unit for Zoomx || 3. The relevant cost per unit for Zoomx 4. The relevant cost per unit for Zoomx 11 5. The relevant margin per unit for Zoomx 14 6. The relevant margin per unit for Zoomx 11 4 7. Which products should be further processed and why
