Edmonton Chemical Company manufactures two industrial chemicalproducts in a joint process. In May, 16,000 gallons of inputcosting $67,000 were processed at a cost of $161,000. The jointprocess resulted in 12,000 pounds of Resoline and 4,000 pounds ofKrypto. Resoline sells for $20 per pound, and Krypto sells for $40per pound. Management generally processes each of these chemicalsfurther in separable processes to produce more refined chemicalproducts. Resoline is processed separately at a cost of $6 perpound. The resulting product, Resolite, sells for $34 per pound.Krypto is processed separately at a cost of $5 per pound. Theresulting product, Kryptite, sells for $51 per pound.
1. Allocate the companyâs joint production costs for May usingthe net-realizable-value method. (Do not round yourintermediate calculations.)
Joint Products Allocation of Joint Costs Resoline Krypto Total
2. Edmontonâs management is considering an opportunity toprocess Kryptite further into a new product called Omega. Theseparable processing will cost $39 per pound. Packaging costs forOmega are projected to be $7 per pound, and the anticipated salesprice is $90 per pound. Calculate the incremental profit or lossfrom processing Kryptite into Omega.
Incremental Gain OR Loss ?? $ ??? Per Pound
* Please show work and bold or highlight correct answers in thecharts above.
Edmonton Chemical Company manufactures two industrial chemicalproducts in a joint process. In May, 16,000 gallons of inputcosting $67,000 were processed at a cost of $161,000. The jointprocess resulted in 12,000 pounds of Resoline and 4,000 pounds ofKrypto. Resoline sells for $20 per pound, and Krypto sells for $40per pound. Management generally processes each of these chemicalsfurther in separable processes to produce more refined chemicalproducts. Resoline is processed separately at a cost of $6 perpound. The resulting product, Resolite, sells for $34 per pound.Krypto is processed separately at a cost of $5 per pound. Theresulting product, Kryptite, sells for $51 per pound.
1. Allocate the companyâs joint production costs for May usingthe net-realizable-value method. (Do not round yourintermediate calculations.)
| Joint Products | Allocation of Joint Costs |
| Resoline | |
| Krypto | |
| Total |
2. Edmontonâs management is considering an opportunity toprocess Kryptite further into a new product called Omega. Theseparable processing will cost $39 per pound. Packaging costs forOmega are projected to be $7 per pound, and the anticipated salesprice is $90 per pound. Calculate the incremental profit or lossfrom processing Kryptite into Omega.
| Incremental | Gain OR Loss ?? | $ ??? | Per Pound |
* Please show work and bold or highlight correct answers in thecharts above.
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Related questions
Christiansen Corporation manufactures joint products W and X.During a recent period, joint costs amounted to $340,000 in theproduction of 20,000 gallons of W and 70,000 gallons of X. Bothproducts will be processed beyond the split-off point, giving riseto the following data:
| W | X | |
| Separable processingcosts | $30,000 | $150,000 |
| Sales price (pergallon) if processed beyond split-of | $14 | $10 |
1.
The joint cost allocated to W under the net-realizable-valuemethod would be: (Do not round your intermediatecalculations.)
$75,556.
$76,667.
$97,143.
$106,250.
None of these.
2.
The joint cost allocated to X under the net-realizable-valuemethod would be: (Do not round your intermediatecalculations.)
$233,750.
$213,333.
$197,143.
$213,750.
None of these.
| Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $97,000 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 | ||||
| A | $ | 5 | per pound | 10,000 | pounds | |
| B | $ | 6 | per pound | 15,000 | pounds | |
| C | $ | 16 | per gallon | 4,000 | 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: |
| Product | Additional Processing Costs | Selling Price | ||||||||||
| A | $ | 45,000 | $ | 8 | per pound | |||||||
| B | $ | 36,000 | $ | 11 | per pound | |||||||
| C | $ | 14,000 | $ | 20 | per gallon | |||||||
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