Question

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 $2,000 disposal cost for the by-product. A summary of a recent month’s activity at Marshall is shown below: Ying Yang Bit Units sold 100,000 80,000 20,000 Units produced 100,000 80,000 20,000 Separable processing costs—variable $ 280,000 $ 86,000 $ — Separable processing costs—fixed $ 20,000 $ 14,000 $ — Sales price $ 6.00 $ 12.50 $ 1.50 Total joint costs for Marshall in the recent month are $268,000, of which $115,240 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.

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 $2,000 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 100,000 100,000 $280,000 $ 20,000 $ 6.00 Yang 80,000 80,000 $ 86, 000 $ 14,000 $ 12.50 Bit 20,000 20,000 $ - $ - $ 1.50 Total joint costs for Marshall in the recent month are $268,000, of which $115,240 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

Answer 1

of Manuba chening Cost Per 1. Calculation unit for each Top three Products - Iving Yang Bit Particulars $76,380 $61,104 $15,22 Share of Joint Cast -fined CW.N.1) Share of Joint Cost Variable $57,620 $46,096||$18.9 (W. N.2) - Separable Processing Cash-Variable $9,80,000 $86,000 $4,000 - Separable Processing cost-fixed) $20,000 Disposal Cost $2000 A Total Manutachering Cost $4,34,000 207200 $28,800 B) Total units Produced 11,00,000 (80000 20,000 Manufacturing Cost Per unit 184.34 1$2.59 $1.44 (A/B) working Notes 1 share of Joint Cost Apportionment of Joint Cost fixed based on units Produced Particulars units Produced 1,00,000 80,000 Bit 20,000 9,00,000 Total Fixed Cost = $2,68,000 - $ 115,940 = $1,59,760 Share of Ying = $1,59,760 x 1,00,000 2,00,000 $ 76,380 share of Yang = $1,59,760 x 80,000 9,00,000 = $61,104 Ying yang

Share of Bit $1,59,766 x 90,000 900,000 h SD = $ 15,276 2 on Apportionment of Joint Cost - variable based units Produced. Total variable Cost = $115, quo Share of uing = $ 115,quo x 1,00000 2,00,000 - $ 57,620 share of yang = $ 115,200 x 80,000 2,00,000 = $46096 Share of Bit = $115, guo 2000 2,00,000 = $.115.24

Product for Yang each Bit DOO Ying 100,000 $6.00 yang 80000 $19.50 200 $12 $30000 11524 900,000 46096 57,620 2) Calculation of Total Gross Margin for Particulars unit Sold Marsale Price per unit Sales valere - $6,00,000 $0,00,000 $39 Less + share of Joint Cost - variable Separable Processing Cost - Variable 9,80,000 86000 Contribution Less - share of Joint Cost - Fined 76,380 66104 1512 Separable Processing cost - fired - 90,ooo luooo 2000 Dispo sai cost Gross Margin $1,66,000 $ 7,92,800 $ 1200 Note ! Assume Disposee cost be freda 2,62, 380 8,67,904 18197