Acct3333 Ch 15 In-class soln 2010

Acct3333 Ch 15 In-class soln 2010 - Chapter 15 - In-Class...

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Chapter 15 - In-Class Solutions 15-19 (30 min.) Process further or sell, joint-cost allocation. A diagram of the situation is in Solution Exhibit 15-19. 1. Product A (5,000 units disposed at splitoff point) Incremental revenues, 5,000  ×  $0 $         0 Incremental costs, 5,000  ×  $0.24     1,200 Incremental operating income $ (1,200 ) Product A (5,000 units processed further) Incremental revenues, 5,000  ×  $1.80 $9,000 Incremental processing costs Fixed $7,200 Variable, 5,000  ×  $1.08   5,400   12,600 Incremental operating income $ (3,600 ) Product B (15,000 units sold at splitoff point) Incremental revenues, 15,000  ×  $0.60 $9,000 Incremental processing costs, 15,000  ×  $0          0 Incremental operating income $9,000 Product B (15,000 units processed further) Incremental revenues, 15,000  ×  $1.80 $27,000 Incremental processing costs Fixed $  1,200 Variable, 15,000  ×  $1.20   18,000   19,200 Incremental operating income $  7,800 Product C (10,000 units disposed of at splitoff) Incremental revenues, 10,000  ×  $0 $        0 Incremental costs, 10,000  ×  $1.08    10,800 Incremental operating income $(10,800 ) Product C (10,000 units processed further) Incremental revenues, 10,000  ×  $6.48 $64,800 Incremental processing costs Fixed $12,000 Variable, 10,000  ×  $1.32   13,200   25,200 Incremental operating income $39,600
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15-19 (cont’d) Summary of the alternatives is: Dispose at Process Preferred Product Splitoff Further Alternative A $(1,200) $ (3,600) $ (1,200) Dispose at splitoff B 9,000 7,800 9,000 Sell at splitoff C (10,800 )   39,600   39,600 Process further $(3,000     )   $43,800 $47,400 2. Revenues Product B, 15,000  ×  $0.60 $  9,000 Product C, 10,000  ×  $6.48   64,800 $73,800 Costs Joint costs, $6,000 + (5,000  ×  $2.40) $18,000 Disposal costs, A: 5,000  ×  $0.24 1,200 Processing costs C: $12,000 + $13,200 25,200 Selling and administrative costs   16,800 no  61,200 Gross margin $12,600 SOLUTION EXHIBIT 15-19
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15-20 (10 min.) Estimated net realizable value method. A diagram of the situation is in Solution Exhibit 15-20 (all numbers are in thousands, other than per-unit costs).
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This note was uploaded on 10/23/2011 for the course ACCT 3333 taught by Professor Don during the Summer '11 term at Dalhousie.

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Acct3333 Ch 15 In-class soln 2010 - Chapter 15 - In-Class...

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