Homework Answers
Solution 1:
| Computation of net advantage from further processing | |||
| Particulars | Product X | Product Y | Product Z |
| Revenue after further processing | $20.00 | $40.00 | $70.00 |
| Revenue without further processing | $16.00 | $26.00 | $48.00 |
| Incremental revenue | $4.00 | $14.00 | $22.00 |
| Further processing cost | $8.00 | $20.00 | $20.00 |
| Net advantage (Disadvantage) of further processing | -$4.00 | -$6.00 | $2.00 |
| Decision | Sell at Split off | Sell at Split off | Further process |
Hence 3rd option is correct.
Solution 2:
| Computation of weighted average contribution margin per unit | |||
| Particulars | Jungle Gyms | Tree house | Total |
| Selling price per unit | $120.00 | $200.00 | |
| Variable cost per unit | $90.00 | $100.00 | |
| Contribution margin per unit | $30.00 | $100.00 | |
| Sales mix | 60% | 40% | |
| Weighted average contribution margin per unit | $18.00 | $40.00 | $58.00 |
Break even units= Fixed costs / weighted average contribution margin per unit
= $253,750 / $58 = 4375 units
Nos Jungle gym to be sold at break even = 4375*60% = 2625 units
Hence 3rd option is correct.
Solution 3:
Nos of units to be sold to earn target profit = (Fixed costs + Target profit) / CM per unit
= ($400,000 + $40,000) / $20 = 22000 units
Hence 3rd option is correct.
Add Answer to:
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in a joint processing operation. Joint processing costs up to the
split-off point total $350,000 per quarter. For financial reporting
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on the basis of their relative sales value at the split-off point.
Unit selling prices and total output at the split-off point are as
follows:
Product
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A
$
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per pound
15,000
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B
$
8
per...
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split-off point total $330,000 per quarter. For financial reporting
purposes, the company allocates these costs to the joint products
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Unit selling peices and total output at the split-off point are as
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in a joint processing operation. Joint processing costs up to the
split-off point total $350,000 per quarter. For financial reporting
purposes, the company allocates these costs to the joint products
on the basis of their relative sales value at the split-off point.
Unit selling prices and total output at the split-off point are as
follows:
Product
Selling Price
Quarterly
Output
A
$
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per pound
15,000
pounds
B
$
8
per...
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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $325,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Quarterly Output 12,000 pounds 18,800 pounds 3,200 gallons Selling Price $ 15.00 per pound $...
Dorsey Company manufactures three products from a common input in a
joint processing operation. Joint processing costs up to the
split-off point total $330,000 per quarter. For financial reporting
purposes, the company allocates these costs to the joint products
on the basis of their relative sales value at the split-off point.
Unit selling peices and total output at the split-off point are as
follows:
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