Question

Problem 7-48 Joint Products; By-Products (Appendix) [LO 7-6, 7-7] The Marshall Company has a joint production process that produces two joint products and a by-product. The joint products are Ying and Yang, and the by-product is Bit. Marshall accounts for the costs of its products using the net realizable value method. The two joint products are processed beyond the split-off point, incurring separable processing costs. There is a $1,300 disposal cost for the by- product. A summary of a recent month's activity at Marshall is shown below: Units sold Units produced Separable processing costs-variable Separable processing costs-fixed Sales price Ying 65,000 65,000 $182,000 $ 13,000 $ 6.00 Yang 52,000 52,000 $ 55,000 $10,000 $ 12.50 Bit 13,000 13,000 $ - $ - $ 1.50 Total joint costs for Marshall in the recent month are $188,200, of which $80,926 is a variable cost. Required: 1. Calculate the manufacturing cost per unit for each of the three products. (Round manufacturing cost per unit answers to 2 decimal places.) 2. Calculate the total gross margin for each product. Ying Yang Bit Manufacturing cost per unit Total gross margin

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Answer 1

and cost between Main Roduct Ying and Yang Joint a Allocatur of cost point cost Totud Iff, 200 lest, not She proceeds from by products (1360 X1.5) -1300 16200) heet 110,000 Allocable Joint cost Joint cost allocate to Ying 170,000 x 65000 units - $94,445 11 7,000 units Joint cost allocake to Yang 170,000 x 52,000 units $75,555 117000 unit) Joint cost & Separable Processing lost units produced An. 1.) Manufactching cost per unit. Ying - 94,445 + 162,000 + 18000 65,000 cines $ 4.453 pef unite 2 Yang 75,555 + 55,000 + 10,000 and 2) 52000 - $ 2.7of Cappon) pos unit Computation of Gloss malgin of each product. o Ying (86 - 14.456) x 65000 unit) $ 100555 $100, 7500 100, 750. o Yang ($12.5 - $2.70) X5 2000 units. 7 $509,600