Rose Chemical, Inc., processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May,
Question:
Rose Chemical, Inc., processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $300,000. Production and sales value information for the month is as follows:
Product | Liters Produced | Sales Value at Splitoff | Separable Costs/liter | Final Selling Price |
Turpentine | 16,500 | $9.00 | $1.20 | $12.00 |
Paint thinner | 16,000 | $7.00 | $0.80 | $7.50 |
Spot remover | 7,500 | $7.60 | $0.90 | $9.00 |
Example of Per Unit Answer: 4.10 Two decimal points. No comma, space, or $ sign.
Assume company is using physical measures at split-off to allocate joint costs. Thus,
Total cost per unit of Turpentine =
Total cost per unit of Paint thinner =
Total cost per unit of Spot remover =
Assume company is using the sales value at splitoff method to allocate joint costs. Thus,
Total cost per unit of Turpentine =
Total cost per unit of Paint thinner =
Total cost per unit of Spot remover =
Assume sales value at split-off point are not available. As a result, company is using the net realizable value (NRV) method to allocate joint costs. Thus,
Total cost per unit of Turpentine =
Total cost per unit of Paint thinner =
Total cost per unit of Spot remover =
Assume company after additional analysis decided on which products should be sold at split-off point and which products should be processed further and sold then in order to have optimal gross profit.
What would be company's gross profit at optimal decision?
Example of Answer: 4000 Round your answer. No decimal point, space, comma, or $ sign.
Gross profit at optimal decision =
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan