Question
The following questions relate to Kyle Company, which manufactures products KA, KB, and KC from a joint process. Joint product costs were $188,000. Additional information
The following questions relate to Kyle Company, which manufactures products KA, KB, and KC from a joint process. Joint product costs were $188,000. Additional information follows.
| If Processed Further | ||||||||||
| Product | Units Produced | Sales Value at Split-Off | Sales Values | Additional Costs | ||||||
| KA | 57,000 | $ | 350,000 | $ | 440,000 | $ | 65,000 | |||
| KB | 71,000 | 320,000 | 380,000 | 53,000 | ||||||
| KC | 35,000 | 260,000 | 350,000 | 41,000 | ||||||
After the publication of recent scientific test results, the government has banned the sale of product KC. IF KC is produced, it must be disposed of in an approved way that costs $183,200 for every 35,000 units produced.
Required: a. Assuming that Kyle Company continues to use the physical quantities method of allocation, what joint costs will be allocated to KA and to KB, respectively? b. Which, if either, product would you recommend Kyle Company sell at split-off?
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Market Audit And Analysis
Authors: Nicole Lorat
1st Edition
3640438892, 978-3640438891
