Allocating Joint Costs Using the Constant Gross Margin Method

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

Product	Gallons	Further Processing Cost per Gallon	Eventual Market Price per Gallon
L-Ten	3,500	$0.50	$ 2.00
Triol	4,000	1.00	5.00
Pioze	2,500	1.50	6.00

Chapter 7 BEXBEX.07.11

I only need answers for Pioze and Total

Allocating Joint Costs Using the Constant Gross Margin Method A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows: Further Processing Eventual Market Product Gallons Cost per Gallon Price per Gallon L-Ten 3,500 $0.50 $ 2.00 Triol 4,000 1.00 5.00 Pioze 2,500 1.50 6.00 Required: 1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze. Total Revenue 42,000 Total Costs $ 22,400 Total Gross Profit $ 19,600 2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar. Joint Cost Product Allocation L-Ten $ 1,983 Accounting numeric field Triol 6,666 Pioze 4,465 x Total 12,900 x (Note: The joint cost allocation does not equal $12,900 due to rounding.)