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Joint allocation with ending inventories Darl Company operates a simple chemical process to reduce a single material into three separate items X,Y and Z. This
Joint allocation with ending inventories Darl Company operates a simple chemical process to reduce a single material into three separate items X,Y and Z. This chemical reaction is processed in Department A. Departments A B Costs incurred Direct mat Dir labour Var mfg OH Fixed Mfg OH 150,000 110,000 80,000 60,000 50,000 25,000 75,000 50,000 Products X and Y are ready for sale immediately upon split-off without further processing or additional costs. Product Z must be further processed before being sold. Product Z is processed in Dept B. There is no available market price at split off for Z. Sales Data: Y 340 Z 475 120 Sales in tonnes Ending inventory (in tonnes) Sales in dollars 180 $240,000 60 $510,000 25 $475,000 There were no beginning inventories of X,Y,Z. There was no beginning or ending work in process. Required: 1) Calculate the cost of ending inventories and cost of goods sold for X, Y and Z for 2021 using NRV method of joint cost allocaction. 2) Compare gross margin % of X,Y and Z for 2021
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