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Joint cost allocation; sell or process further In a joint process, Wear Art produces precut fabrics for three products: dresses, jackets, and blouses. Joint
Joint cost allocation; sell or process further In a joint process, Wear Art produces precut fabrics for three products: dresses, jackets, and blouses. Joint cost is allocated on the basis of relative sales value at split-off. The company can choose to process each of the products further rather than sell the fabric at split-off. Information related to these products follows. Number of units produced Joint cost allocated Sales values at split-off point Additional costs of processing further Sales values after all processing Dresses Jackets Blouses Total 24,000 38,400 14,400 ? $331,200 76,800 ? $864,000 ? $552,000 $192,000 $1,440,000 $62,400 $48,000 $187,200 $297,600 $720,000 $643,200 $504,000 $1,867,200 a. What amount of joint cost should be allocated to dresses and blouses? Dresses Blouses Allocated joint costs $ 0 $ 0 b. What is the sales value at the split-off point for dresses? $ 0 c. Should any of the products be processed beyond the split-off point? Show computations. Dresses Jackets Blouses Net benefit (cost) of further processing $ 0 $ 0 $ 0 Process Further? dresses jackets blouses d. If 28,800 jackets are processed further and sold at the regular selling price, what is the gross profit on the sale? $ 0
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