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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.

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Answer #1
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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