Sales Value SplitOff Method/ Physical Measure Method

2. Hills Chemical, Inc., processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $240,000. Production and sales value information for the month is as follows: Product Turpentine Paint thinner Spot remover Units Produced 15,000 liters 15,000 liters 7,500 liters Sales Value at Splitoff Point $ 120,000 100,000 50,000 Required: Determine the amount of joint cost allocated to each product if the physical-measure method is used. (10 points) Answer: Product Units Produced Percentage Joint Costs Allocated Turpentine Paint thinner Spot remover Totals 1. Trade Company processes sugar cane into three products. During May, the joint costs of processing were $600,000. Production and sales value information for the month were as follows: Product Sugar Sugar Syrup Fructose Syrup Units Produced 15.000 10,000 5,000 Sales Value at Splitoff Point Separable costs $ 200,000 $ 60,000 175,000 192,000 125,000 96,000 Required: Determine the amount of joint cost allocated to each product if the sales value at splitoff method is used. (10 points) Answer: Product Units Sales Value Percent Joint Cost Allocated Sugar Sugar Syrup Fructose Syrup Total