Questions -
Q1. Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X2, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:
|
Product
|
Cases
|
Sales Value at Splitoff Point
|
Separable Costs
|
Selling Price
|
|
Catsup
|
100,000
|
$6 per case
|
$3.00 per case
|
$28 per case
|
|
Juice
|
150,000
|
8 per case
|
5.00 per case
|
25 per case
|
|
Canned
|
200,000
|
5 per case
|
2.50 per case
|
10 per case
|
Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.
Q2. Zenon Chemical, Inc. processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $240,000. Production and sales value information for the month is as follows:
|
Product
|
Units Produced
|
Sales Value at Splitoff Point
|
|
Turpentine
|
6,000 liters
|
$60,000
|
|
Paint thinner
|
6,000 liters
|
50,000
|
|
Spot remover
|
3,000 liters
|
25,000
|
Determine the amount of joint cost allocated to each product if the physical-measure method is used.
Q3. Oregon Lumber processes timber into four products. During January, the joint costs of processing were $280,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:
|
|
Sales Value at
|
|
Product
|
Board feet
|
Splitoff Point
|
Ending Inventory
|
|
2 x 4's
|
6,000,000
|
$0.30 per board foot
|
500,000 bdft.
|
|
2 x 6's
|
3,000,000
|
0.40 per board foot
|
250,000 bdft.
|
|
4 x 4's
|
2,000,000
|
0.45 per board foot
|
100,000 bdft.
|
|
Slabs
|
1,000,000
|
0.10 per board foot
|
50,000 bdft.
|
Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to three decimal places when necessary.