ACCO 330 Chapter Notes - Chapter 3: Financial Statement, Gross Margin

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coralcod378

21 Feb 2017

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Chapter 3 cost allocation: joint products and by-products. Required for financial statements (inventoried costs and cogs) and for tax purposes. Also required for internal purposes (economic decisions, assess financial performance) Joint costs: costs which are incurred for all products simultaneously. Broken up into individual products at the split off point. Individual products are processed further with separable costs to make an improved product. Joint products: outputs with a high sales value but not separately identifiable as individual products until the split off point. Separable costs: costs incurred after the split off point and are assignable to individual products. By-product: low sales value compared to main or joint products. Market-based data ex: revenues, 3 methods: sales value at split off. Allocates joint costs on base of the relative sales value at the split-off point of total production for each product. Costs are allocated to products in proportion to their revenue-generating power.

Related Questions

NESA corporation manufactures two products, A and B, from ajoint process. It costs NESA $500,000 in a joint process to produce3,000 units of A and 2000 units of B. Both products can be sold athte split-off point or they can be processed fruther to copletion.The company will incur separable costs of $40 per units for A and$60 for B to process further. A and B can be sold for $160 and$200, respectively, at completion.

Required

a)What is the amount of separable costs assigned to products Aand B assuming that joint costs are allocated using the netrealizable value method?

b) What is the amount of joint costs assigned to products A andB assuming that joint costs are allocated using the physical unitsmethod?

c) What is the amount of total costs assigned to products A andB assuimng that joint costs are allocated uisng the physical unitsmethod?

d) should product A be sold at the split-off point or processedfurther assuming that it can be sold for $110 at split-off? Justifyanswer with numbers

aquamarinechinchilla901

Corporation manufactures two products, X and Y, from a jointprocess. It costs corporation $600,000 in a joint process toproduce 3,000 units of x and 2,000 units of Y. Both products can besold at the split-off point or they can be processed furhter tocompletion. The company will incur separable costs of #45 per unitsfor X and $90 for Y to process further. X and Y can sold for $240and $300, respectively, at completion.

REQUIRED:

A. What is the amount of separable costs assigned to products Xand Y assuming that joint costs are allocated using the netrealizable value method?

B. What is the amount of joint costs assigned to products X andY assuming that joint costs are allocated using the final salesvalue method>

C. What is the amount of total costs assigned to products X andY assuming that joint costs are allocated using the physical unit;smethod?

D. Should product X be sold at the split-off point or proceedfurther assuming that it can sold for $165 at split-off? Justifyyour answer with numbers.

peachhippopotamus491

Rocky Mountain Company produces two products (X and Y) from ajoint process. Each product may be sold at the split-off point orprocessed further. Additional processing requires no specialfacilities, and production costs of further processing are entirelyvariable and traceable to the products involved. Jointmanufacturing costs for the year were $60,000. Sales values andcosts were as follows: If the joint production costs are allocatedbased on the physical-units method, the amount of joint costassigned to product X would be:If Processed Further Product UnitsMade Sale Value at Split-Off Sale Value Separable Cost X 9000 4000078000 10500 Y 6000 80000 90000 7500

salmonsnake514

ACCO 330 Chapter Notes - Chapter 3: Financial Statement, Gross Margin

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