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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

  1. 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

  1. 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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