Hsu Company manufactures two products (A and B) from a joint process that cost $330,000 for the year just ended. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Further information follows. Product Pounds Produced Per-Pound Sales Price If Processed Further Sales Value Separable Cost A 40,000 $ 12 $ 410,000 $ 120,000 B 60,000 8 320,000 70,000 If the joint costs are allocated based on the physical-units method, what would be the amount of joint cost assigned to product A?
Hsu Company manufactures two products (A and B) from a joint process that cost $330,000 for the year just ended. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Further information follows. Product Pounds Produced Per-Pound Sales Price If Processed Further Sales Value Separable Cost A 40,000 $ 12 $ 410,000 $ 120,000 B 60,000 8 320,000 70,000 If the joint costs are allocated based on the physical-units method, what would be the amount of joint cost assigned to product A?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...
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Hsu Company manufactures two products (A and B) from a joint
Product |
Pounds Produced |
Per-Pound Sales Price |
If Processed Further |
|
Sales Value |
Separable Cost |
|||
A |
40,000 |
$ 12 |
$ 410,000 |
$ 120,000 |
B |
60,000 |
8 |
320,000 |
70,000 |
If the joint costs are allocated based on the physical-units method, what would be the amount of joint cost assigned to product A?
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