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Problem 16-26 - 16-22 1a PANEL A Allocation of Joint Costs...

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16-22 1a. PANEL A: Allocation of Joint Costs using Sales Value at Splitoff Method Special B/ Beef Ramen Special S/ Shrimp Ramen Total Sales value of total production at splitoff point (10,000 tons × $10 per ton; 20,000 × $15 per ton) $100,000 $300,000 $400,000 Weighting ($100,000; $300,000 ÷ $400,000) 0.25 0.75 Joint costs allocated (0.25; 0.75 × $240,000) $60,000 $180,000 $240,000 PANEL B: Product-Line Income Statement for June 2009 Special B Special S Total Revenues (12,000 tons × $18 per ton; 24,000 × $25 per ton) $216,000 $600,000 $816,000 Deduct joint costs allocated (from Panel A) 60,000 180,000 240,000 Deduct separable costs 48 ,000 168 ,000 216 ,000 Gross margin $ 108 ,000 $ 25 2,000 $36 0,000 Gross margin percentage 50% 42% 44% 1b. PANEL A: Allocation of Joint Costs using Physical-Measure Method Special B/ Beef Ramen Special S/ Shrimp Ramen Total Physical measure of total production (tons) 10,000 20,000 30,000 Weighting (10,000 tons; 20,000 tons ÷ 30,000 tons) 33% 67% Joint costs allocated (0.33; 0.67 × $240,000) $80,000 $160,000 $240,000 PANEL B: Product-Line Income Statement for June 2009 Special B Special S Total Revenues (12,000 tons × $18 per ton; 24,000 × $25 per ton) $216,000 $600,000 $816,000 Deduct joint costs allocated (from Panel A) 80,000 160,000 240,000 Deduct separable costs 48 ,000 168 ,000 216 ,000 Gross margin $ 88 ,000 $ 27 2,000 $36 0,000 Gross margin percentage 41% 45% 44% 1c. PANEL A: Allocation of Joint Costs using Net Realizable Value Method Special B Special S Total Final sales value of total production during accounting period (12,000 tons × $18 per ton; 24,000 tons × $25 per ton) $216,000 $600,000 $816,000 Deduct separable costs 48 ,000 168 ,000 216 ,000 Net realizable value at splitoff point $ 168 ,000 $ 432 ,000 $ 6 00,000 Weighting ($168,000; $432,000 ÷ $600,000) 28% 72% Joint costs allocated (0.28; 0.72 × $240,000) $67,200 $172,800 $240,000 PANEL B: Product-Line Income Statement for June 2009 Special B Special S Total Revenues (12,000 tons × $18 per ton; 24,000 tons ×
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