Incorporated produces joint products A, B, and C from a joint process. Information concerning a batch produced in May at a joint cost of $120,000 was as follows:
Units Sold
Price (after additional processing)
Separable Processing cost
Units Produced
Total Joint Cost
Sales Price at Split-off
Sales Value (after additional processing)
Sales Value at Split Off
Required:
1. Allocate the joint costs to the joint products using the physical measure method.
2. Calculate the gross margin for each of the three products using the cost allocation for the physical measure method in part (1) above.
3. Allocate the joint costs to the joint products using the net realizable method.
4. Calculate the gross margin for each of the three products using the cost allocation for the net realizable value method in part (3) above.
Note: Calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar.
A B C Total
2,500 4,000 1,500 8,000
$ 35 $ 22 $ 15
$ 35,000 $ 12,000 $ 16,000 $ 63,000
2,500 4,000 1,500 8,000
$ 25.00 $ 12.00 $ 13.00
$ 87,500 $ 88,000 $ 22,500 $ 198,000
$ 62,500 $ 48,000 $ 19,500 $ 130,000
