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Two finished products, [A & B], are sold for $16 a unit and $24 a unit,...

Two finished products, [A & B], are sold for $16 a unit and $24 a unit, respectively. Each product can also be sold at the split off point. Product A can be sold for $10 and Product B for $8. Joint costs for the two products totalled $8,000 for January for 600 units of A and 500 units of B.

QUESTION: What are the respective joint costs assigned to each unit of products A and B if the sales value at split off method is used?

A)

$6.40 and $14.40
B)

$6.40 and $9.10
C)

$8.00 and $9.10
D)

$5.92 and $8.88
E)

$8.00 and $6.40
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Answer #1
Total split off market value (600 *$10) + (500 *$8) 10000
Product A = ($6,000/$10,000 *$8,000 /600) 8
Product B = ( $4,000/$10,000 *$8,000 )/500) 6.4
Answer Option E
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