Chapter 7 Question 4

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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 prod at split-off, but must be processed further. Information on one batch of the three products is as follows: 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. 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 places and round all other computations to the nearest dollar. (Note: The joint cost allocation does not equal due to rounding.) Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar. (Note: The joint cost allocation does not equal due to rounding.)