Question

Required information [The following information applies to the questions displayed below.] Berger Company manufactures products Delta, Kappa, and Omega from a joint process. Production, sales, and cost data for July follow. Delta Kappa Omega Total Units produced 5,500 2,900 1,600 10,000 Joint cost allocation $ 63,000 ? ? $ 90,000 Sales value at split-off ? ? $ 26,250 $ 175,000 Additional costs if processed further $ 8,500 $ 6,500 $ 4,500 $ 19,500 Sales value if processed further $ 145,000 $ 62,500 $ 57,500 $ 265,000 Required: Assuming that joint costs are allocated using the relative-sales-value method, what were the joint costs allocated to products Kappa and Omega? (Do not round intermediate calculations.) Assuming that joint costs are allocated using the relative-sales-value method, what was the sales value at split-off for product Delta? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) Use the net-realizable-value method to allocate the joint production costs to the three products. (Round the calculation of "Relative Proportion" to the nearest whole percent. Round your final answers to the nearest dollar amount.)

Answer 1

1) Joint cost allocated to Kappa and Omega using Relative sales method? Allocation to Omega Omega Sales price Total Sales price Joint cost Allocation of Joint cost to Omega 26,250 $ 175,000 $ 90,000 (90,000 x 26,250/175,000) $ 13,500 Allocation to Kappa Total Joint cost Less: Allocated to Delta Less: Allocated to Omega Allocated to Kappa 90,000 (63,000) (13,500) 13,500 Каppа $ Omega 13,500 $ Joint cost allocation 13,500 2) Calculation of Sales value of Delta using relative sales method Joint cost allocated Total Joint Cost Total Sales price 63,000 $ 90,000 175,000 Sales price of Delta (175,000 x 63,000/90,000) 122,500 Delta Sales value at split off point $ 122,500

3) Allocation of Joint cost using net realizable value? Sales price at further processing Allocation of Net Realizable Incremental Cost value Relative Portion Joint Costs Cx D 56% $ 23%$ 21% $ [A] [B] A-B] [D] Delta 8,500 50,400 145,000 136,500 Каpра Omega Total 56,000 62,500 6,500 20,700 57,500 4,500 53,000 18,900 19,500 265,000 245,500 90,000 Calculation of Relative Portion Delta (136,500/245,500) Kappa (56,000 /245,500) Omega (53,000/245,500) 56% 23% 21% Note: Due to rounding off answer may differ nearest whole decimal