Beta purchases trees from Vendor and processes them up to the splitoff point where two products (paper
Question:
Beta purchases trees from Vendor and processes them up to the splitoff point where two products (paper and pencil casings) are obtained and sold separately. The following information was collected for the month of October:
Trees processed: 250 trees
Production: paper 180,000 sheets
pencil casings 180,000
Sales: paper 174,000 at $0.12 per page
pencil casings 178,500 at $0.15 per casing
The cost of purchasing 250 trees and processing them up to the splitoff point to yield 180,000 sheets of paper and 180,000 pencil casings is $12,500. Beta’s accounting department reported no beginning inventory.
1) What is the total sales value at the splitoff point for paper?
2) What is the total sales value at the splitoff point of the pencil casings?
3) What are the paper's and the pencil's approximate weighted cost proportions using the sales value at
splitoff method, respectively?
4) If the sales value at splitoff method is used, what are the approximate joint costs assigned to ending inventory for paper?
5) If the sales value at splitoff method is used, what is the approximate production cost for each pencil
casing?
Corp makes ProductA, ProductB, and ProductC from a joint process. June production (in units) is 5,000 ProductA; 8,750 ProductB; and 10,000 ProductC. Respective per unit selling prices at splitoff are $75, $50, and $25. Joint costs up to the splitoff point are $187,500.
6) If joint costs are allocated based upon the sales value at splitoff, what amount of joint costs will be allocated to the ProductA?
7) What amount of joint costs will be allocated to the ProductC?
