ACC103 Q3

# 00 1500000 460000000 cost of ending inventories x

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Unformatted text preview: st of Ending Inventories = x 70,000 units = \$1,288,000.00 \$7,750,000.00 3(c) Constant Gross Margin Method Goldex Sales Value \$15,000,0001 Joint Costs \$4,500,000 6 Additional Costs \$3,000,000 Gross Margin \$7,500,0005 Gross Margin 50% Percentage Holdex \$9,500,0002 \$3,250,0008 \$1,500,000 \$4,750,0007 50% Total \$24,500,000 \$7,750,000 \$4,500,000 \$12,250,0003 4 50% (i) Goldex Total Cost = \$4,500,000 + \$3,000,000 = \$7,500,000 Cost of Ending Inventories = x 80,000 units = \$2,000,000 (ii) Holdex Total Cost = \$3,250,000 + \$1,500,000 = \$4,750,000 Cost of Ending Inventories = x 70,000 units = \$1,330,000 3(d) Further Processing Decision After Further Processing Selling price \$62 per unit Additional Processing Cost \$14 per unit Incremental Revenue (per unit) Incremental Cost (per unit) Incremental Profit (per unit) Before Further Processing \$50 per unit \$0 per unit \$129 \$1410 (\$2)11 Further process “Goldex” into “Moldex” will decrease profit by \$2 per unit, it is not profitable to further process “Goldex” into “Moldex”. So, the company should not further process “Goldex” into “Moldex”. 1 300,000 units* \$50 per units =\$15,000,000 250,000 units* \$38 per units = \$9,500,000 3 \$24,500,000 -\$7,750,000 -\$4,500,000 = \$12,250,000 2 4 5 = 50% \$15,000,000 x 50% = \$7,500,000 \$15,000,000 - \$3,000,000 - \$7,500,000 = \$4,500,000 7 \$9,500,000 x 50% = \$4,750,000 8 \$9,500,000 - \$1,500,000 - \$4,750,000 = \$3,250,000 9 \$62-\$50=\$12 10 \$14-\$0=\$14 11 \$12-\$14= -\$2 6...
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## This document was uploaded on 03/26/2014.

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