Cambridge Company manufactures three main products, L, M, and N, from a joint process. Additional information...
Cambridge Company manufactures three main products, L, M, and N,
from a joint process. Additional information for June production
activity follows:
| L | M | N | Total | |||||||||
| Units produced | 60,200 | 46,000 | 11,800 | 118,000 | ||||||||
| Joint costs | ? | ? | ? | $ | 456,000 | |||||||
| Sales value at split-off | $ | 426,000 | $ | 276,000 | $ | 66,000 | $ | 768,000 | ||||
| Additional costs if process further | $ | 94,000 | $ | 36,000 | $ | 18,000 | $ | 148,000 | ||||
| Sale value if processed further | $ | 544,000 | $ | 326,000 | $ | 84,000 | $ | 954,000 | ||||
Assuming that the 11,800 units of N were processed further and sold
for $84,000, what was Cambridge's gross profit from this sale?
Assume the physical quantities method of allocation is used.
Multiple Choice
-
$20,400.
-
$34,163.
-
$36,000.
-
$75,183.
Homework Answers
| Sales Value if processed further | 84,000 | |||||
| less: | ||||||
| Addittional costs if process further | -18000 | |||||
| joint cost allocated (456000/118000)*11800 | -45600 | |||||
| net income | 20,400 | Answer | ||||
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Cambridge Company manufactures three main products, L, M, and N,
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