Question

Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are...

Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows:

X Y Z Total
Units produced 15,000 11,000 7,000 33,000
Allocated joint costs $ 172,020 $ 109,800 $ 85,400 $ 367,220
Sales value at split-off ? 180,000 140,000 602,000
Additional costs for further processing 41,000 33,000 24,000 98,000
Sales value if processed further 373,000 198,000 158,000 729,000

Product X’s sales value at the split-off point is:

Multiple Choice

  • $248,000.

  • $77,000.

  • $282,000.

  • $150,500.

  • $175,000.

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Answer #1
Answer
Option C is correct : $ 282,000
Explanation
Product X’s sales value at the split-off point is:
Total $ 602000 -  Product Y’s sales value at the split-off point $ 180000 - Product Z’s sales value at the split-off point $ 140,000 = $ 282,000
Therefore
Correct option is C : 282,000
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