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Acct306 Homework Ch16

Acct306 Homework Ch16 - CHAPTER 16 COST ALLOCATION JOINT...

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16-1 CHAPTER 16 COST ALLOCATION: JOINT PRODUCTS AND BYPRODUCTS 16-32 Joint-cost allocation with a byproduct. 1. Sales value at splitoff method: Byproduct recognized at time of production method Floor Mats Car Mats Rubber Shreds (lbs) Products manufactured 31,250 a 93,750 b 50,000 c Products sold 25,000 85,000 43,000 Ending inventory 6,250 8,750 7,000 a 25 floor mats/100 tires = .25 floor mats per tire × 125,000 tires = 31,250 floor mats b 75 car mats/100 tires = .75 car mats per tire × 125,000 tires = 93,750 car mats c (125,000 tires/100) × 40 lbs = 50,000 lbs rubber shreds Joint cost to be charged to joint products = Joint Cost – NRV of Byproduct = $600,000 – (50,000 lbs × 0.70 per lb) = $600,000 – $35,000 = $565,000 Floor Mats Car Mats Total Sales value of mats at splitoff, 31,250 × $12; 93,750 × $6 $375,000 $562,500 $937,500 Weighting, $375,000; $562,500 ÷ $937,500 0.40 0.60 Joint costs allocated, 0.40; 0.60 × $565,000 $226,000 $339,000 $565,000 Floor Mats Car Mats Total Revenues, 25,000 × $12; 85,000 × $6 $300,000 $510,000 $810,000 Cost of goods sold Joint costs allocated, 0.40; 0.60 × $565,000 226,000 339,000 565,000 Less: Ending inventory (45,200) b (31,640) c (76,840) Cost of goods sold 180,800 307,360 488,160 Gross margin $119,200 $202,640 $321,840 b 6,250 × $226,000/31,250 = $45,200 c 8,750 × $339,000/93,750 = $31,640
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16-2 2. Sales value at splitoff method: Byproduct recognized at time of sale method Joint cost to be charged to joint products = Joint Cost = $600,000 Floor Mats Car Mats Total Sales value of mats at splitoff, 31,250 × $12; 93,750 × $6 $375,000 $562,500 $937,500 Weighting, $375,000; $562,500 ÷ $937,500 0.40 0.60 Joint costs allocated, 0.40; 0.60 × $600,000 $240,000 $360,000 $600,000 Floor Mats Car Mats Rubber Shreds Total Revenues, 25,000 × $12; 85,000 × $6 $300,000 $510,000 $30,100 d $840,100 Cost of goods sold Joint costs allocated, 0.40; 0.60 × $600,000 240,000 360,000 600,000 Less: Ending inventory (48,000) e (33,600) f (81,600) Cost of goods sold 192,000 326,400 518,400 Gross margin $108,000 $183,600 $30,100 $321,700 d 43,000 lbs × $0.70 per lb. = $30,100 e
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