Quiz 3 Solution - WIP - Department 3 96,600 FG - Alpha...

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1 ACCT 310 – Quiz 3 Solution Fall 2008 1. June’s joint product costs Direct material, Department 1 $ 95,000 Direct labor, Department 1 40,000 Applied overhead, Department 1 (.70 * $40,000) 28,000 Direct material, Department 2 40,000 Direct labor, Department 2 80,000 Applied overhead, Department 2 (1.20 * $80,000) 96,000 Total June joint product costs $ 379,000 2. Approximated net realizable value of joint products at split-off NRV of Beta: ($6 * 50,000) - [$10,000 + $20,000 + (1.10 * $20,000)] $248 ,000 NRV of Alpha: ($5 * 100,000) 500,000 NRV of Psi: ($3 * 75,000) 225,000 Total NRV of joint products $ 973,000 3. Joint product cost allocation schedule To Beta: ($248,000/$973,000) * $379,000 $ 96,600 To Alpha: ($500,000/$973,000) * $379,000 194,759 To Psi: ($225,000/$973,000) * $379,000 87,641 Total joint product costs $ 379,000 4. Journal entry related to allocation of June’s joint product costs
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Unformatted text preview: WIP - Department 3 96,600 FG - Alpha 194,759 FG - Psi 87,641 WIP - Department 2 379,000 2 5. Total gross profit from sales of Beta during June Joint product costs allocated to Beta $ 96,600 Dept. 3 direct material - Beta 10,000 Dept. 3 direct labor - Beta 20,000 Dept. 3 applied overhead - Beta (1.10 * $20,000) 22,000 Total production costs - Beta $ 148,600 Unit production cost - Beta ($148,600/50,000) $ 2.972 Sales ($6.00 * 15,000) $ 90,000 Cost of goods sold ($2.972 * 15,000) (44,580) Gross profit $ 45,420 6. Balance of finished goods inventory of Alpha on June 30 Joint product costs allocated to Alpha (= total production costs) $ 194,759 Unit production cost - Alpha ($194,759/100,000) $ 1.948 June 30 finished goods inventory - Alpha ($1.948 * 35,000) $ 68,180...
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Quiz 3 Solution - WIP - Department 3 96,600 FG - Alpha...

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