ZuoTi.Pro
Question

Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into...

Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three products appear. Product A is sold at the split-off point with no further processing. Products B and C require further processing before they are sold. Product B is processed in Department Y, and product C is processed in Department Z. The company uses the estimated net realizable value method of allocating joint production costs. Following is a summary of costs and other data for the quarter ended June 30.

No inventories were on hand at the beginning of the quarter. No raw material was on hand at June 30. All units on hand at the end of the quarter were fully complete as to processing.

Products A B C
Pounds sold 22,000 64,000 73,000
Pounds on hand at June 30 49,000 0 42,000
Sales revenues $ 52,800 $ 320,000 $ 401,500
Departments X Y Z
Raw material cost $ 163,000 $ 0 $ 0
Direct labor cost 74,000 91,000 281,000
Manufacturing overhead 25,000 32,000 101,000

Required:

a. Determine the following amounts for each product: (Do not round intermediate calculations.)

(1) Estimated net realizable value used for allocating joint costs.

Product estimated net realizable values

product a

product b

product c

total

(2) Joint costs allocated to each of the three products.

product a

product b

product c

total

(3) Cost of goods sold.

product a

product b

product c

total

(4) Finished goods inventory costs, June 30.

product a

product b

product c

total

b. Assume that the entire output of product A could be processed further at an additional cost of $5.50 per pound and then sold for $12.50 per pound. Compute the incremental income from further processing A.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

1. Estimated net realizable value used for allocating joint costs are as follows - Calculation of Total Production Costs - Total Departments Raw material cost Direct labor cost Manufacturing overhead $ 163,000 $ 163,000 $74,000 $91,000 281,000$446,000 158,000 $25,000 $32,000 101,000 $ Total Production Cost $262,000$123,000$382,000 $767,000 Joint Costs of Product A, B, C is $ 262,000 Costs of Separate Processing of Product B is $ 123,000 Costs of Separate Processing of Product C is $ 382,000 Calculation of Selling Price Per Pound - Products Sales revenues Pounds sold Selling Price Per Pound $52,800 $ 320,000 64,000 5.00 401,500 73,000 5.50 22,000 2.40Calculation of Estimated Net Realizable Value - Total Products A. Pounds sold B. Pounds on hand at June 30 C. Total Pounds Produced (A + B) D. Selling Price Per Pound E. Gross Sales Value (CX D) Less : Costs of Separate Processing Estimated Net Realizable Value % of Total Estimated Net Realizable Value 22,000 49,000 71,000 64,000 73,000 42,000 115,000 5.50 159,000 91,000 250,000 64,000 2.40 $ 5.00 $ $170,400$320,000$ 632,500 $1,122,900 505,000 617,900 100.00 0 123,000$ 382,000 $ $170,400$ 197,000$250,500 $ 27.58 31.88 40.54 2. Joint costs allocated to each of the three products are as follows - Joint Costs of Product A, B, C is $ 262,000 % to be Allocated Joint Cost Amount Products 27.58$ 72,259.60 31.88$ 83,525.60 40.54 $106,214.80 100.00 $262,000.00 Total Joint Cost3. & 4. Calculation of Cost of goods sold and Finished goods inventory costs, June 30 - Total Products Joint Costs Costs of Separate Processing Total Production Costs Total Pounds Produced A. Cost of goods sold per unit B. Pounds sold Cost of goods sold (A XB) 72,259.60 83,525.60 $106,214.80 262,000.00 $123,000.00 $382,000.00 $ 505,000.00 $ 72,259.60 $206,525.60 $488,214.80 $ 767,000.00 115,000 250,000.00 71,000 1.02 22,000 64,000 3.23 64,000 4.25 73,000 $ 159,000.00 $ 22,390.30$206,525.60 $309,910.26 $ 538,826.16 42,000 $ 91,000.00 C. Pounds on hand at June 30 Finished Goods Inventory Costs, June 30 (AXC) 49,000 $ 49,869.30 $ $178,304.54$ 228,173.84 b. Computation of Incremental Income from further processing Product A - Product Incremental Revenue 71,000 Pounds X ($ 12.50 $ 2.40* Per pound)) Less - Incremental Cost from further processing (71,000 Pounds X $ 5.50 per pound) Incremental Income from further processing of Product A $ 717,100 $390,500 $326,600 $2.40 is the revenue forgone which must be deducted to arrive at incremental revenue

4 0
Add a comment
Know the answer?
Add Answer to:
Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into...

    Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three products appear. Product A is sold at the split-off point with no further processing. Products B and C require further processing before they are sold. Product B is processed in Department Y, and product C is processed in Department Z. The company uses the estimated net realizable value method of...

  • Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into pr...

    Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three products appear Product A is sold at the split-off point with no further processing. Products B and C require further processing before they are sold, Product B is processed in Department Y, and product C is processed in Department Z. The company uses the estimated net realizable value method of...

  • Question 2 (17 marks) CA firm in country X manufactures 3 products through a joint-production process...

    Question 2 (17 marks) CA firm in country X manufactures 3 products through a joint-production process A. Raw materials, labors, and overheads are put into the process A which generates 3 outputs: CA-1, CA- 2, CA-3. Output CA-1 can be immediately sold at the split-off point, with no further processing. Output CA-2 and CA-3 require further processing before they are sold. CA-2 is processed in process B, and output CA-3 is processed in process C, respectively. The firm uses the...

  • Sell or Process Further Dorsey Company manufactures three products from a common input in a joint...

    Sell or Process Further Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $375,000 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 A B С Selling Price $25 per pound $19 per pound...

  • Jill makes two products out of a joint process—products Beta & Gamma. The joint (common) costs...

    Jill makes two products out of a joint process—products Beta & Gamma. The joint (common) costs incurred are $800,000 for a standard production run that generates 70,000 pounds of Gamma and 30,000 pounds of Beta. Gamma sells for $9.00 per pound whereas Beta sells for $7.00 per pound. 7) If there are no additional processing costs incurred after the splitoff point, the amount of joint cost of each production run allocated to Beta on a sales value at splitoff basis...

  • 20. The Dynamic Company produced three joint products at a joint cost of $500,000. Two of...

    20. The Dynamic Company produced three joint products at a joint cost of $500,000. Two of these products were processed further. Production and sales were as follows: Additional Processing Costs $456,000 Weight Sales nds $884,000 200,000 pounds 272,000 650,000 150,000 pounds If the estimated net realizable value method is used and product Q is accounted for as a main product, ho much of the joint costs would be allocated to product R? A. $222,000 B. S300,000 C, $111,000 D. $105,000

  • Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

    Dorsey Company manufactures three products from a common input 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 $ 16 per pound 15,000 pounds B $ 8 per...

  • Rabito, Inc., is a large food-processing company. It processes 156,000 pounds of peanuts in the peanuts...

    Rabito, Inc., is a large food-processing company. It processes 156,000 pounds of peanuts in the peanuts department at a cost of $219,200 to yield 22,000 pounds of product A, 70,000 pounds of product B, and 17,000 pounds of product C. (Click the icon to view the information.) The company wants to make a gross margin of 10% of revenues on product C and needs to allow 20% of revenues for marketing costs on product C. An overview of operations follows:...

  • Gusler company manufactures three products from a common input in a joint processing operation. Joint processing...

    Gusler company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. 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 $ 3 per pound 10,000 pounds B $ 6 per pound 22,000 pounds C...

  • Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...

    Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $360,000 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 $ 22.00 per pound 13,400 pounds B $ 16.00 per...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT