Question

Marin Products produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Marin's production, sales, and costs follows.

	DBB-1			DBB-2			DBB-3			Total
Units Sold		17,000			26,000			38,000			81,000
Price (after addt’l processing)	$	25		$	10		$	35
Separable Processing cost	$	117,000		$	47,000		$	70,000		$	234,000
Units Produced		17,000			26,000			38,000			81,000
Total Joint Cost										$	3,800,000
Sales Price at Split-off	$	20		$	30		$	50

The amount of joint costs allocated to product DBB-2 using the sales value at split-off method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Multiple Choice

• $981,540.

• $197,630.

• $427,880.

• $797,620.

• $2,390,580.

Answer 1

Ans:$981,540 Is Correct Answer

Explanation:

	DBB-1	DBB-2	DBB-3	Total
1.Units Sold	17000	26000	38000	81000
2.Sales Price at Split-off	20	30	50
3.Total Sales(1*2)	340000	780000	1900000	3020000
4.Split Ratio(3/Total sales)	0.1126	0.2583	0.6291
5.Joint Cost(total Joint cost*4)	427880	981540	2,390,580	3,800,000