Problem
Foster Company produces joint products XX, YY, and ZZ from a joint process.
Information concerning a batch produced in the current month at a joint cost of $120,000 was:
Note: Formatting Issues. The last column after ZZ is the Total column.
|
|
XX
|
YY
|
ZZ
|
Total
|
|
Units sold
|
2,500
|
4,000
|
1,500
|
8,000
|
|
Sales Price after additional processing
|
$ 35.00
|
$ 22.00
|
$ 15.00
|
$ 72.00
|
|
Separable processing cost
|
$ 35,000
|
$ 12,000
|
$ 16,000
|
$ 63,000
|
|
Units produced
|
2,500
|
4,000
|
1,500
|
8,000
|
|
Total joint cost
|
$ 120,000
|
|
|
|
|
Sales price at Split-off
|
$ 25.00
|
$ 12.00
|
$ 13.00
|
$ 50.00
|
1. Allocate the joint costs to the joint products using the physical measure method.
2. Calculate the gross profit for each product using the costs in part 1.
3. Allocate the joint costs to the joint products using the net realizable method.
4. Calculate the gross profit for each product using the costs in part 3.