Physical Units Method
Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:
Direct materials | $73,659 |
Direct labor | 37,301 |
Overhead | 22,246 |
At the split-off point, a batch yields 1,589 barlon, 4,189 selene, 3,467 plicene, and 5,201 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $20 per unit, plicene sells for $27 per unit, and corsol sells for $33 per unit.
Required:
1. Allocate the joint costs using the physical units method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar. Note: The total of the allocated cost does not equal to the one provided in the question data due to rounding error.
Allocated Joint Cost | ||
Barlon | $ | |
Selene | ||
Plicene | ||
Corsol | ||
Total | $ |
2. Suppose that the products are weighted as shown below:
Barlon | 1.0 |
Selene | 2.0 |
Plicene | 1.6 |
Corsol | 2.4 |
Allocate the joint costs using the weighted average method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar.
Allocated Joint Cost | ||
Barlon | $ | |
Selene | ||
Plicene | ||
Corsol | ||
Total | $ |
(1) physical units method allocates cost to products in proportion to the units of product produced.
Total units = 1,589+4,189+3,467+5,201
=14,446
Joint cost = $73,659+$37,301+$22,246
=$133,206
units | percent (units/total units) | Allocated costs(Total joint cost*percent) | |
Barlon | 1589 | 0.1100(1589/14,446) | $14,653(0.1100*$133,206) |
Selene | 4189 | 0.2900(4189/14,446) | $38,630(0.2900*$133,206) |
Plicene | 3467 | 0.2400(3467/14,446) | $31,969(0.2400*$133,206) |
Corsol | 5201 | 0.3600(5201/14446) | $47,954(0.3600*$133,206) |
Total | 14,446 | $133,206 | |
2) physical units are applied to the obtain percentage of weighted cases.percentage are multiplied by join costs to avail allocated joint costs.
Total weight = 1+2+1.6+2.4=7.0
Weight | Percent | Allocated Joint Cost | ||
Barlon | 1.0 | 0.1429(1/7) | $19,035 ($133,206*0.1429) | |
Selene | 2.0 | 0.2857(2/7) | $38,057 ($133,206*0.2857) | |
Plicene | 1.6 | 0.2286 (1.6/7) | $30,451 ($133,206*0.2286) | |
Corsol | 2.4 | 0.3429(2.4/7) | $45,676 ($133,206*0.3429) | |
Total | 7.0 | $133,219 |
Physical Units Method Alomar Company manufactures four products from a joint production process: barlon, selene, plicene,...
Physical Units Method Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows: Direct materials $73,659 Direct labor 37,301 Overhead 22,246 At the split-off point, a batch yields 1,589 barlon, 4,189 selene, 3,467 plicene, and 5,201 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $20 per unit, plicene sells for $27 per unit, and corsol sells...
Physical Units Method Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows: Direct materials $73,659 Direct labor 37,301 Overhead 22,246 At the split-off point, a batch yields 1,589 barlon, 4,189 selene, 3,467 plicene, and 5,201 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $20 per unit, plicene sells for $27 per unit, and corsol sells...
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