E. E. Manufacturing Inc.'s joint cost of producing 2,000 units of Product X, 1,000 units of Product
Question:
E. E. Manufacturing Inc.'s joint cost of producing 2,000 units of Product X, 1,000 units of Product Y, and 1,000 units of Product Z is $50,000. The unit sales values of the three products at the split-off point are Product X $30, Product Y $100, and Product Z$90. Ending inventories include 200 units of Product X, 300 units of Product Y, and 100 units of Product Z.
a. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their relative sales values.
b. Assume that Product Z can be sold for $120 a unit if it is processed after split-off at a cost of $10 a unit. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their adjusted sales values.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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