Flora Perfume Company manufactures two perfume products in a joint process. In July, raw materials costing...
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Flora Perfume Company manufactures two perfume products in a joint process. In July, raw materials costing $50,000 were processed at a conversion cost of $80,000. The joint process resulted in 10 litres of product A and 15 litres of product B. Product A can be sold for $2 per millilitres, and product B can be sold for $1.5 per millilitres. Management generally processes each of these chemicals further in separable processes to produce more refined perfume products. Product A is processed separately at a cost of $0.5 per millilitres. The resulting product, product X sells for $5 per millilitres. Product B is processed separately at a cost of $0.75 per millilitres. The resulting product, product Y, sells for $3 per millilitres. Required: Allocate the company's joint production costs for July using: a. The physical unit method b. The relative-sales-value method. c. The net-realizable-value method Flora Perfume Company manufactures two perfume products in a joint process. In July, raw materials costing $50,000 were processed at a conversion cost of $80,000. The joint process resulted in 10 litres of product A and 15 litres of product B. Product A can be sold for $2 per millilitres, and product B can be sold for $1.5 per millilitres. Management generally processes each of these chemicals further in separable processes to produce more refined perfume products. Product A is processed separately at a cost of $0.5 per millilitres. The resulting product, product X sells for $5 per millilitres. Product B is processed separately at a cost of $0.75 per millilitres. The resulting product, product Y, sells for $3 per millilitres. Required: Allocate the company's joint production costs for July using: a. The physical unit method b. The relative-sales-value method. c. The net-realizable-value method
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a The Physical Unit Method Under the physical unit method the joint production costs are allocated t... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
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