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Question 2 Garrison Co. produces three products X, Y, and Z from a joint process. Each product may be sold at the split-off point or

Question 2

Garrison Co. produces three products X, Y, and Z from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond split-off. Joint production costs for the year were $134,000. Sales values and costs needed to evaluate Garrison's production policy follow.

Units Sales Value at If Processed Further
Product Produced Split Off Sales Value Additional Costs
x 22,000 $ 43,500 $ 97,500 $ 4,700
y 12,000 25,500 50,500 10,000
z 6,000 30,000 44,000 12,000

The amount of joint costs allocated to product Z using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Multiple Choice

  • $20,100.

  • $36,200.

  • $40,200.

  • $60,300.

  • $73,700.

The Long Term Care Plus Company has two service departments actuarial and premium rating, and two operations departments marketing and sales. The distribution of each service department's efforts to the other departments is shown below:

FROM TO
Actuarial Rating Marketing Sales
Actuarial 0 % 40 % 20 % 40 %
Rating 25 % 0 % 37.5 % 37.5 %

The direct operating costs of the departments (including both variable and fixed costs) were as follows:

Actuarial $ 38,000
Premium Rating $ 20,000
Marketing $ 38,000
Sales $ 48,000

The total cost accumulated in the marketing department using the direct method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Multiple Choice

  • $60,667.

  • $64,667.

  • $79,333.

  • $83,333.

  • $47,667.

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