Chapter 7 BEX

1. BEX.07.11 PLEAE ANSWER IN SAME FORMAT OR BOLD ANSWERS :D

Allocating Joint Costs Using the Constant Gross Margin Method A company manufactures three pruducts, L-Ten, Triol, and Proze, from a juint process. Each production run custs $12.900. None of the products can be sold at split-off, but must be processed further. Information un une batch of the three products is as follows: Further Processing Cost per Gallon Eventual Market Price per Gallen Product Gallons L-Ten 3.500 $0.50 $ $2.00 Triol 4,000 1.00 5.00 Plaze 2,500 1.50 6.00 Required: 1. Calculate the total revenue, total costs, and total gross profit the company will eam on the sale of L-Ten, Triol, and Pioze. Total Revenue $ V 42,000 Total Costs $ 22,400 Total Grass Profit $ 19,600 2. Allocate the joint cost to L-Ten, Trol, 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 Allocation Product L-Ten s 1,983 Triol 6,667 X Piose 4,250 X Total $ 12,900 X (Note: The joint cost allocation does not equal $12,900 due to rounding.) 3. What if it cost $2 to process each gallon of Trial beyond the spit-off point? How would that affect the allocation of joint cost to these three products? Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar. Joint Cost Product Allocation L-Ten S 2,650 Tric 4,571 x Pioze 5,6797 Total s $ 12,900 X (Note: The joint cost allocation does not equal $12,900 due to rounding.)