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Silver Fashion produces two types of garments : DSuits and DGowns . The two products share common inputs such as textile and yarn . The

Silver Fashion produces two types of garments: DSuitsand DGowns. The two products share common inputs such as textile and yarn. The production of gowns results in a waste product referred to as cut pieces, which Silver Fashion transfers at negligible costs local household workers. In April 2020, the following data were reported for the production and sales of DSuits and DGowns:

Joint Costs

Joint Costs of Textile and Yarn

$500,000

DSuits

DGowns

Beginning Inventory

0

0

Production(in Units)

4,000

5,000

Sales (in Units)

3,800

4,000

Selling price per unit

$1,200

$3,000

Due to the popularity of its products, Silver Fashion decides to add a new line of products that targets modern couples. These new products are produced by making changes to the style and cut of the original DSuits and DGowns to to be sold under the names SSuits and SGowns respectively. Following are the monthly data for all the products:

Joint Costs

SSuits

SGowns

Joint Costs of Textile and Yarn

$1,000,000

Separable Costs

$1,800,000

$4,500,000

DSuits

DGowns

SSuits

SGowns

Beginning Inventory

0

0

0

0

Production (in Units)

4,000

6,000

4,000

6,000

Transfer to further process (in Units)

4,000

6,000

Sales (in Units)

4,000

6,000

Selling price per unit

$1,200

$2,200

$2,000

$3,000

Required:

1. Show the diagram to represent the joint cost and joint products
2. Prepare the Joint cost allocation and the Income Statement of Silver Fashion for SSuits and SGownsusing the following methods:
a. Physical-measure method
b. Net realizable value method

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