Question
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
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$20,100.
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$36,200.
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$40,200.
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$60,300.
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$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
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$60,667.
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$64,667.
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$79,333.
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$83,333.
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$47,667.
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