Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 5, Problem 17E
Joint cost allocation-market value at split-off method
Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of 112,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows:
Using the market value at split-off method, allocate the $12,000 joint cost of production to each product.
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Joint Cost Allocation—Market Value at Split-off Method
Burn-on Inc. processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of $15,800. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows:
Product
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Gasoline
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Using the market value at split-off method, allocate the $15,800 joint cost of production to each product.
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Gasoline
$fill in the blank 1
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fill in the blank 2
Kerosene
fill in the blank 3
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Joint Cost Allocation—Market Value at Split-off Method
Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of $12,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows:
Gasoline
$2 per gallon
Diesel
1 per gallon
Kerosene
3 per gallon
Using the market value at split-off method, allocate the $12,000 joint cost of production to each product.
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Joint Cost Allocation—Market Value at Split-off Method
Sugar Sweetheart, Inc., jointly produces raw sugar, granulated sugar, and caster sugar. After the split-off point, raw sugar is immediately sold for $0.20 per pound, while granulated and caster sugar are processed further. The market value of the granulated sugar and caster sugar is estimated to both be $0.25 at the split-off point. One batch of joint production costs $1,640 and yields 3,000 pounds of raw sugar, 3,600 pounds of granulated sugar, and 2,000 pounds of caster sugar at the split-off point.
Allocate the joint costs of production to each product using the market value at split-off method.
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$fill in the blank 1
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fill in the blank 2
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Chapter 5 Solutions
Managerial Accounting
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