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Required information Problem 17-29 Joint Costs; Allocation and Production Decisions (LO 17-4, 17-5) [The following information applies to the questions displayed below.] Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net-realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories. Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $1,900,000 in the manufacture of HTP-3, PST-4, and RJ-5. Finished goods inventory in gallons (October 1) October sales in gallons October production in gallons Additional processing costs Final sales value per gallon HTP-3 20,000 690,000 780,000 $914,000 $ 4.40 PST-4 54,800 345,000 390,000 $856,000 $ 6.40 RJ-5 3,400 170,000 190,000 $ 68,000 $ 5.40 Problem 17-29 Part 1 Required: 1. Determine Biondi Industries' allocation of joint production costs for the month of October. (Round the calculation of "Relative Proportion" to the nearest whole percent. Round your final answers to the nearest dollar amount.) Allocation of Joint Cost Joint Products HTP-3 PST-4 RJ-5

Answer 1

Biondi Industries
Net Realization method of allocation
		(A)	(B)	(C )=(A)-(B)	(D )
Joint cost per run	Joint Products	Sales value of final products	Additional cost of processing	Net Realizable value	Relative Proportion	Allocation of Joint Costs
1900000	HTP-3	$ 34,32,000.00	$ 9,14,000.00	$ 25,18,000.00	49%	935144
	PST-4	$ 24,96,000.00	$ 8,56,000.00	$ 16,40,000.00	32%	609070
	RJ-5	$ 10,26,000.00	$     68,000.00	$    9,58,000.00	19%	355786
Total				$ 51,16,000.00		1900000
Sales value of final Products
HTP-3	(780000*$4.40)
PST-4	(390000*$6.40)
RJ-5	(170000*$5.40)
Relative Proportion
HTP-3	(2518000/5116000)
PST-4	($1640000/$5116000)
RJ-5	($958000/$5116000)
Allocation of Joint Cost
HTP-3	($1900000*49%)
PST-4	($1900000*32%)
RJ-5	($1900000*19%)