Question
QUESTION 32 A joint process of making Products M1, M2, and M2 has incurred a $280,000 cost. The following information is given: Product Sales value
QUESTION 32
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A joint process of making Products M1, M2, and M2 has incurred a $280,000 cost. The following information is given:
Product
Sales value now
(at split-off)
Further processing cost
Sales value after further processing
M1
$100,000
n.a
n.a
M2
$500,000
n.a
n.a
M3
n.a
$200,000
$600,000
The company allocates the joint cost to the products using the estimated net realizable value method. The costs allocated to M3 is $__________.
A. $160,000
B. $140,000
C. $112,000
D. $93,333
QUESTION 29
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Jane Company has two service departments (S1 and S2) and two user departments (U1 and U2). The company uses the reciprocal method. The following information is available.
Service
Department
Cost allocation Base
Amount of service used by
S1
S2
U1
U2
S1
Machine hours (MH)
1,500 MH
2,500 MH
6,000 MH
S2
Square footage (SF)
2,000 SF
3,000 SF
5,000 SF
You do not need to set up the simultaneous equations. Simply assume that:
Total costs (direct + allocated) costs of S1: $300,000
Total costs (direct + allocated) costs of S2: $200,000
How much of the service department costs will be allocated to U1?
A. $127,833
B. $135,000
C. $250,000
D. $163,235
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