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Question 4

A manufacturing Corporation produces three joint products. During a recent accounting period, joint costs totaled $365,000. Additional data appear below:

M1 M2 M3

Volume (units) 150,000 50,000 300,000

Sales value at the split-off point $375,000 $155,000 $600,000

Sales value after further processing $450,000 $200,000 $900,000

Separable costs $50,000 $35,000 $100,000

Required:

1. Use Physical output method to allocate joint costs to joint products.

2. Use Sales value at split-off point method to allocate joint costs to joint products.