Question 6. Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $100,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: product X, $50,000; product Y, $90,000; and product Z, $60,000. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Additional Processing Costs Sales Value after Further Processing $80,000 $150,000 $75,000 X Y. Z $35,000 $40,000 $12,000 Required: Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.
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- Venezuela Oil Inc. transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by-product base oil. The base oil is sold at the split-off point for $1,000,000 of annual revenue, and the joint processing costs to get the crude oil to split-off are $10,000,000. Additional information includes: Required: Determine the allocation of joint costs using the net realizable value method, rounding the sales value percentages to the nearest tenth of a percent. (Hint: Reduce the amount of the joint costs to be allocated by the amount of the by-product revenue.)Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $45,500 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $27,300 $ 18,200 $ 45,500 Sales value at split-off point $ 30,000 $20,000 $50,000 Costs of further processing $ 24,200 $ 18,500 $ 42,700 Sales value after further processing $ 47,800 $58,300 $ 106,100 Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d.…Cat Company produces products C, A, and T from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $75,000 per year are allocated to the products based on the relative number of units produced. Data for Cat's operations for the current year are as follows: Units Allocated Joint Sales Value Product Produced Production Cost At Split-off C 12,000 $23,000 $80,000 A 8,000 34,000 71,000 T 13,000 18,000 51,000 Product C can be processed beyond the split-off point for an additional cost of $29,000 and can then be sold for $103,000. Product A can be processed beyond the split-off point for an additional cost of $31,000 and can then be sold for $116,000. Product T can be processed beyond the split-off point for an additional cost of $17,000 and can then be sold for $65,000. Which products should be processed beyond the split-off point? (Show all calculations) What is a joint product cost? Explain in your own words.
- ats Assume a company has three products-A, B, and C-that emerge from a joint process. The joint processing costs that are incurred up to the split-off point equal $1,200,000. The selling prices and outputs for each product at the split-off point are as follows: Product A B С Selling Price $33 per pound $29 per pound $24 per pound Product A B C Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows: Output 14,000 pounds 18,000 pounds 19,000 pounds Additional Processing Costs $65,000 $72,000 $88,000 Selling Price $37 per pound $34 per pound $30 per pound The company is trying to decide whether to retain or discontinue the entire joint manufacturing process. What is the financial advantage (disadvantage) of continuing to operate the entire joint manufacturing process?ABC Co. produces products R, J, and C from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $92,000 per year are allocated to the products based on the relative number of units produced. Data for ABC Co.'s operations for the current year are as follows: Product R J C с Units Produced 8,000 10,000 5,000 Allocated Joint Production Cost $32,000 40,000 20,000 Sales Value at Split-off $76,000 71,000 48,000 Product R can be processed beyond the split-off point for an additional cost of $26,000 and can then be sold for $105,000. Product J can be processed beyond the split-off point for an additional cost of $38,000 and can then be sold for $117,000. Product C can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $57,000. Required: Which products should be processed beyond the split-off point? Show all of your work. ABC Inc. produces three products. Data concerning the…CUIK-983 company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. The company allocates these costs to the Joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output 10,000 pounds A $ 5 per pound B $ 6 per pound 22,000 pounds C $ 14 per gallon 5,000 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Product Processing Costs Selling Price A $ 53,000 B $ 38,000 C $ 18,000 Which products should be processed further? Multiple Choice Multiple Choice B and C A and C A, B, and C A and B $ 7 per pound $ 11 per pound $20 per gallon
- CUIK-649 company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output 10,000 pounds A $ 4 per pound B $ 6 per pound 22,000 pounds с $ 10 per gallon 5.000 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Product Processing Costs Selling Price A $ 53.000 $ B $ 38,000 $ с $ 18,000 $ Which products should be processed further? Multiple Choice O O O A and B A and C B and C AR and C 7 per pound 12 per pound 19 per gallonDorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $330,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product A B с Selling Price $16.00 per pound $ 10.00 per pound $22.00 per gallon Product A B C Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Processing Costs $ 61,390 $ 87,645 $ 35,300 Quarterly Output 12,200 pounds 19,100 pounds 3,400 gallons Required 1 Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on…Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $370,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price A B с Product A $ 24.00 per pound $ 18.00 per pound $ 30.00 per gallon Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: B C Additional Processing Costs $ 81,150 $ 117,125 $ 52,900 Quarterly Output 13,800 pounds 21,500 pounds 5,000 gallons Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on…
- Assume a company has two products—A and B—that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $14,800 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A? Multiple Choice $(3,200) $3,200 $(22,000) $22,000Your Corporation produces products P, Q, and R from a joint production process. Each product may be sold at the split-off point or processed further. Joint production costs of $80,000 per year are allocated to the products based on the relative number of units produced. Which products should be processed further? P Q R Units produced 3,000 6,000 1,000 Selling price at split off $37,500 $46,500 $15,500 Cost to process further $10,000 $30,000 $5,000 Selling price after processing $50,000 $65,000 $25,000 a. P, Q and R b. P and Q c. Just P d. P and R e. Just QDorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $385,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product A B с Product A B с Selling Price $27.00 per pound $21.00 per pound $ 33.00 per gallon Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Processing Costs $ 89,220 $ 129,170 $ 60,160 Quarterly Output 14,400 pounds 22,400 pounds 5,600 gallons Required 1 Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2.…