Question
XYZ manufacturing company uses a joint production process that produces three products at the split-off point. Joint production costs during April were $720,000. The company
XYZ manufacturing company uses a joint production process that produces three products at the split-off point. Joint production costs during April were $720,000. The company uses the sales value method for allocating joint costs. Product information for April was as follows:
Products
| R | S | T |
Units produced | 2,500 | 5,000 | 7,500 |
Units sold | 2,000 | 6,000 | 7,000 |
Sales prices: |
|
|
|
At the split-off | $100 | $80 | $20 |
After further processing | $150 | $115 | $30 |
Costs to process after split-off | $150,000 | $150,000 | $100,000 |
Assume that all three products are main products and that they can be sold at the split-off point or processed further, whichever is economically benefited to the company. What is the total cost of Product S in April if joint cost allocation is based on sales value at the split-off?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started