Question:
Cost Allocation -Weighted Average Method. The product engineering staff of the Bockhorst Company prepared the following analysis of relative weights for cost elements in the manufacture of joint products A, B, and C in Department 10:
|
Product
|
Output for Each Unit
of Raw Materials Input
|
Output for Each Hour
of Labor Crew Time
|
Factory
Overhead
|
|
A
|
3
|
1
|
The engineers determined that twice as much weight should be given to time spent in production as is given to size; that products A and B are the same total weight and shape, but product C is in total twice as heavy and twice their bulk.
|
|
B
|
4
|
1-1/6
|
|
C
|
2
|
1-1/6
|
Joint costs incurred in Department 10 in the month of March:
|
Materials
|
$220,000
|
|
Labor
|
190,000
|
|
Factory overhead
|
1 70,000
|
|
Total costs incurred
|
$580,000
|
Required: Joint costs allocation to the three products by the weighted average method.