Unable to solve requirement 4
The Stenback Spirits Company produces two products-methanol (wood alcohol and turpentine-by a joint process. Joint costs amount to $122,000 per batch of output. Each batch totals 12.500 gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, S4 per gallon, and turpentine, Sa per gallon Methanol sells for 528 per gallon. Turpentine sells for $20 per non Read the quirements 3.125 2 Requirement 1. How much of the joint costs per batch will be allocated to methanol and to turpentine, assuming that joint costs are allocated based on the number of nailons altit (Round the wint in the decimale) Requirements Methanol Turpentine Total Physical measure of total production 9.375 12,500 Weighting 0.25000 0.75000 1.00000 1. How much of the joint costs per batch will be alocated to methanol and to Joint costs located 30,500 $ 91,500 $ 122,000 turpentine, ssuming that joint costs are allocated based on the number of gations at spiltoff point? Requirement 2. Fort costs are allocated on an NRV basis, how much of the joint costs will be allocated to methanol and burpentine ir joint costs we sfocated on NRV basis, how much of the joint costs will be allocated to methanol and to turpentine? Methanol Turpentine Total 3. Prepare product-ine income statements per batch for requirement 1 and 2 Assume no beginning or ending inventories. Final sales value of total productions 87,500 $ 187.500 $ 275,000 4. The company has discovered an additional process by which the methanol Deduct separable costs 12.500 25.125 40.625 wood alcohon can be made into a pleasant tasting alcoholic beverage. The selling price of this beverage would be 560 a pelion. Additional processing NRV splitoff point $ 75.000 $ 159.375 $ 234,375 galon separable cost required to yield Methanol) The company would have Weighting 0.32000 0.68000 1.00000 to pay excise taxes of 20% on the selling price of the beverage. Assuming no Joint costs allocated other changes in cost, what is the joint cost applicable to the wood alcohol $ 39,040 $ 82.950 $ 122,000 (using the NRV method? Should the company produce the alcohol beverage? Show your computations Requirement 3. Prepare product line income statements per batch for requirement 1 and 2 Assume no beginning or ending inventories Begin with the physical measuremethod Print Done Enter any number in the edit fields and then click Check Answer Requirement 4. The company has discovered an additional process by which the methanol (weed alcohol) can be made into a pleasant-tasting alcoholic beverage. The selling price of this beverage would be 550 a gallon Additional processing would increase separable costs $10 per gallon (in addition to the $4 per gallon separable cost required to yield methanol). The company would have to pay excise taxes of 20% on the selling price of the beverage. Assuming no other changes in cost what is the joint cost applicable to the wood alcohol using the NRV method? Should the company produce the alcoholic beverage? Show your computations Begin by calculating the joint cost applicable to the wood alcohol (using the NRV method) (Round the weights to five decimal places) Alcohol Ber. Turpentine Total Finale value of production 5 187.500 281250 468750 28.126 Deduct separable costs 67600 159,375 234375 NRV at stoff point Weighting 0.32000 0.68000 1.00000 Joint costs allocated
