6A:130 – Fall 2007 Quiz 2 QUIZ 2 – SOLUTION ****** Must show work to receive credit. NO WORK NO CREDIT Brant Corporation manufactures two products out of a joint process – Scout and Andro. The joint cost incurred are $400,000 for a standard production run that generates 70,000 pounds of Scout and 30,000 pounds of Andro. Scout sells for $9.00 per pound while Andro sells for $7.00 per pound. 1. If there are no additional processing costs incurred after the splitoff point, the amount of joint cost of each production run allocated to Scout on a physical – quantity basis is a. $300,000 JTC = $400,000 x $70 / ($70 + $30) JTC = $280,000 b. $280,000 c. $120,000 d. $100,000 2. If there are no additional processing costs incurred after the splitoff point, the amount of joint cost of each production run allocated to Andro on a sales value at splitoff basis is a. $300,000 S > 70 x $9 = $630; A > 30 x $7 = $210; Total sales = $840 JTC = $400,000 x ($210 / $840) JTC = $100,000 b. $225,000 c. $175,000
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