Question
The Marketplace Corporation produces two consumer products and a by-product. Manuka is ready for sale after split-off, while Shea must be further processed. The by-product
The Marketplace Corporation produces two consumer products and a by-product. Manuka is ready for sale after split-off, while Shea must be further processed. The by-product is a heavy residue in the bottom of the vat. The net realizable value of the by-product is credited against the $565,000 joint cost of the Heating Department. Volume and cost data for February is as follows:
Gallons produced | selling price | assertional processing | |
Manuka | 200,000 | $2 | 0 |
Shea | 400,000 | 1.1 | $40,000 |
By-product | 5,000 | 0.5 | 0 |
Use Excel
a. Allocate the Heating Department cost to the products using the physical quantities method.
b. Allocate the Heating Department cost to the products using the workback method.
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