Question: Required Information Problem 17-29 Joint Costs; Allocation and Production Decisions (LO 17-4, 17-5) [The following Information applies to the questions displayed below.] Blondi Industries is
Required Information Problem 17-29 Joint Costs; Allocation and Production Decisions (LO 17-4, 17-5) [The following Information applies to the questions displayed below.] Blondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Blondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Blondi uses the net-realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Blondi Industries uses FIFO (first-In, first-out) in valuing its finished-goods Inventories. Data regarding Blondi's operations for the month of October are as follows. During this month, Blondi Incurred joint production costs of $2,000,000 in the manufacture of HTP-3, PST-4, and RJ-5. Finished goods inventory in gallons (October 1) October sales in gallons October production in gallons Additional processing costs Final sales value per gallon HTP-3 21,000 710,000 820,000 PST-4 56,200 355,000 410,000 RJ-5 3,600 180,000 200,000 $934,000 $ 4.60 $ $881,000 6.60 $ 72,000 $ 5.60 Problem 17-29 Part 3 3-a. Suppose Blondi Industries has a new opportunity to sell PST-4 at the split-off point for $4.40 per gallon. Calculate the per gallon profit (loss) of processing further PST-4. 3-b. Should the company sell PST-4 at the split-off point or continue to process this product further? Complete this question by entering your answers in the tabs below. Req 3A Req 3B Suppose Biondi Industries has a new opportunity to sell PST-4 at the split-off point for $4.40 per gallon. Calculate the per gallon profit (loss) of processing further PST-4. (Round your answer to 2 decimal places.) Per gallon gain of further processing PST-4 < Req 3A Req 3B >
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
