Question

Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $410,000 for a standard production run that generates 290,000 pints of Smooth Skin and 130,000 pints of Silken Skin. Smooth Skin sells for $2.50 per pint, while Silken Skin sells for $4.00 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 $1.60 per pint for Smooth Skin and $1.30 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 $1.60 per pint for Smooth Skin and $1.30 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
2	Physical measure method - silken skin
3	Net realizable value method - silken skin
4	Physical measure method - smooth skin

Answer 1

solutiong chol company manufactures two skin care locations, Joint costs 410000 smooth skin Silken skin 130000 alumber of units (A) selling price (B) 290 000 2. 50 4.0 sales value AXB) 725000 520 000 NRV (2.5-1•6) 290000 = 261000 u-1.3)130 OUD - 35.000 Allocation of Joint costs is Relative Sales Value method Smooth skin Silken skin 4LOOBOX 725000 4100so X 520000 725000+ 520000 72500 +520000 = 238755.02 = 171244.99 physical measuremethod UIDODD x 290000 10000 X 130000 290000+30000 290000+ 130000 = 293095.23 126904.76 410000X261000 41000 X 351000 261000+351000 261000 +351000 - 17u852.9412035147.05 NRV method

1) Relative-sales ralue method smooth skun - $238755.02 2) Physical measure method - silken Skin = $ 126904.76 3) Wet realizable ralue method - Silken skin= $ 235147.05 a physical measure method -smooth skin = $283095.23