Question

Choi Company manufactures two skin care lotions, Smooth skin and Silken Skin, from a joint process. The joint costs incurred are $340,000 for a standard production run that generates 140,000 pints of Smooth Skin and 180,000 pints of Silken Skin. Smooth Skin sells for $3.60 per pint, while Silken Skin sells for $5.30 per pint. (Do not round intermediate calculations. Round final answers to nearest whole dollar amounts.) Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method? 2. If no separable costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin using the physical measure method? 3. If separable processing costs beyond the split-off point are $1.00 per pint for Smooth Skin and $1.20 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin using a net realizable value method? 4. If separable processing costs beyond the split-off point are $1.00 per pint for Smooth Skin and $1.20 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Smooth Skin using a physical measure method? 1. Relative sales value method - Smooth Skin Physical measure method - Silken Skin Net realizable value method - Silken Skin Physical measure method - Smooth Skin 4.

Answer 1

Answer page: 0 Total joint costs = $340000 Required Both products are sold at split off point joint cost allocated to smooth skin using the relative sales value method. Sales Value & Smooth skin = 190000 pints x $ 3.60 per pint =$504000 Sales value of silken skin = 180000 pints * $5.30 per pint = $ 954000 Total skin value = $ 504000 + $954000 = $ 1458000 joint cost allocated to smooth skin = 340000 x 504000 T458000 340000 X 0.34567 $114530

Required page:02 Pont cost allocated to silken skin using physical measure method. Total point skin - ¢ 340000 Quantity & Smooth skin - 140000 pints I cantity of silken skin = 180000 pints Total Quantity = 320000 pints point cost allocated to silken skin 180000 - X 340000 320000 = 0.5625 x 340000 -14191250. Required Separable processing cost allocated to silken cost skin ore incwyned using net joint Realizable value method.

page = 03 Smooth skin silken skin & 3.60 $5.30 140000 180000 $954000 A) sales price. B) Sales quantity (c) sales value (AXB) $504000 ) fwther processing cost per unit $1.00 E) Total further process eng cost (DXB) $140000 5) net realized value (C-6) $364000 Total point cost = $340000 $1.20 & 216000 & 736000 Total net Realized 364000 + 738000 dialue = -$1102000 allocated to silken skin joint cost 738000 340000 X to 2000 - 340000 X 0.669691 -327695 Required @ sepoiable processing cost are incwired point cost. allocated to smooth skin using Physical measure methool

page 204 Total joint cost $340000 Quantity of Quantity of . Total smooth skin = 140000 pints sitten skin - 180000 pints Quantity = 320000 pints joint cost allocated to smooth skin 140000 X 340000 320000 = 0.4375 x 340000 = $ 148750 1. Relative sales value method - Smooth skin 2. physical measure method - Silken skin 3. net realizaba levalve method - silkeo Skin 4olphysical measure melted - Smooth skin $112530 191950 227695 $148750