Joint Cost Allocation

Product Details:

• Product A:
  • Sales Value at Split-off: $200,000
  • Separate Costs after Split-off: $80,000
  • Joint Costs Incurred: $40,000

• Product B:
  • Sales Value at Split-off: $300,000
  • Separate Costs after Split-off: $100,000
  • Joint Costs Incurred: $60,000

Requirements:

• Allocate joint costs between Product A and Product B using the sales value at split-off method.
• Calculate the total cost for each product after allocation.
• Present the results in a detailed table format.
• Discuss the implications of the joint cost allocation on pricing decisions.