1) | Calculate how the Joint Costs of $ 1,22,000 would be allocated between Methanol & Turpentine Under Following Methods | ||||||||
Physical Measure (gallons) | |||||||||
Particulars | Methanol | Turpentine | Total | ||||||
Physical measure of Total Production | 3125 | 9375 | 12500 | ||||||
Weight | 0.25 | 0.75 | 1.00 | ||||||
Joint Cost Allocated | $30,500 | $91,500 | $122,000 | ||||||
2) | Net realizable Value | ||||||||
Particulars | Methanol | Turpentine | Total | ||||||
Final Sales value of Total Production | $87,500 | $187,500 | $275,000 | ||||||
[3,125 x $28] | [9,375 x $20] | ||||||||
Deduct Separable Costs | ($12,500) | ($28,125) | ($40,625) | ||||||
[3,125 x $4] | [9,375 x $3] | ||||||||
NRV at Splitoff Point | $75,000 | $159,375 | $234,375 | ||||||
Weight | 0.32 | 0.68 | 1.00 | ||||||
Joint Cost Allocated | $39,040 | $82,960 | $122,000 | ||||||
Prepare product line income statements per batch for requirement 1 & 2 | |||||||||
3(a) | Physical Measure (gallons) | ||||||||
Particulars | Methanol | Turpentine | Total | ||||||
Sales value of Total Production | $87,500 | $187,500 | $275,000 | ||||||
[3,125 x $28] | [9,375 x $20] | ||||||||
Deduct Joint Costs | ($30,500) | ($91,500) | ($122,000) | ||||||
[$122,000 x 0.25] | [$122,000 x 0.75] | ||||||||
Deduct Separable Costs | ($12,500) | ($28,125) | ($40,625) | ||||||
[3,125 x $4] | [9,375 x $3] | ||||||||
Gross Income | $44,500 | $67,875 | $112,375 | ||||||
3(b) | Net realizable Value | ||||||||
Particulars | Methanol | Turpentine | Total | ||||||
Sales value of Total Production | $87,500 | $187,500 | $275,000 | ||||||
[3,125 x $28] | [9,375 x $20] | ||||||||
Deduct Joint Costs | ($39,040) | ($82,960) | ($122,000) | ||||||
[$122,000 x 0.32] | [$122,000 x 0.68] | ||||||||
Deduct Separable Costs | ($12,500) | ($28,125) | ($40,625) | ||||||
[3,125 x $4] | [9,375 x $3] | ||||||||
Gross Income | $35,960 | $76,415 | $112,375 | ||||||
4) | Net realizable Value | ||||||||
Particulars | Alcoholic beverage | Turpentine | Total | ||||||
Final Sales value of Total Production | $187,500 | $187,500 | $375,000 | ||||||
[3,125 x $60] | [9,375 x $20] | ||||||||
Deduct Separable Costs | ($43,750) | ($28,125) | ($71,875) | ||||||
[3,125 x $14] | [9,375 x $3] | ||||||||
Deduct Excise Taxes @ 20% on Selling Price | ($37,500) | - | ($37,500) | ||||||
[1,87,500 x 20%] | |||||||||
NRV at Splitoff Point | $106,250 | $159,375 | $265,625 | ||||||
Weight | 0.40 | 0.60 | 1.00 | ||||||
Joint Cost Allocated | $48,800 | $73,200 | $122,000 | ||||||
Prepare product line income statements per batch if additional process | |||||||||
Net realizable Value | |||||||||
Particulars | Alcoholic beverage | Alcoholic beverage | Total | ||||||
Final Sales value of Total Production | $187,500 | $187,500 | $375,000 | ||||||
[3,125 x $60] | [9,375 x $20] | ||||||||
Deduct Joint Costs | ($48,800) | ($73,200) | ($122,000) | ||||||
[$122,000 x 0.40] | [$122,000 x 0.60] | ||||||||
Deduct Separable Costs | ($43,750) | ($28,125) | ($71,875) | ||||||
[3,125 x $14] | [9,375 x $3] | ||||||||
Deduct Excise Taxes @ 20% on Selling Price | ($37,500) | - | ($37,500) | ||||||
[1,87,500 x 20%] | |||||||||
Gross Income | $57,450 |
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