The costs of purchasing 10,000 gallons of direct materials and processing it up to the split-off...

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The costs of purchasing 10,000 gallons of direct materials and processing it up to the split-off point to yield a total of 9,500 gallons (shrinkage of 500 gallons) of salable product was $975,000. There were no inventory balances of either product. Product X Product Y Produced at the split- off point in gallons 5,000 4,500 Sales Value at the split-off point $150/gallon $100/gallon Product X may be processed further to yield 4,750 gallons (the remainder is shrinkage) of Product XX, for an additional processing cost of $30 per usable gallon. XX can be sold for $190 per gallon. Product Y can be processed further to yield 4,275 gallons of YY for an additional processing cost per usable gallon of $25. The product YY can be sold for $140 per gallon. Required: 1. Use the appropriate method to allocate the joint cost of $975,000 to the main products. The costs of purchasing 10,000 gallons of direct materials and processing it up to the split-off point to yield a total of 9,500 gallons (shrinkage of 500 gallons) of salable product was $975,000. There were no inventory balances of either product. Product X Product Y Produced at the split- off point in gallons 5,000 4,500 Sales Value at the split-off point $150/gallon $100/gallon Product X may be processed further to yield 4,750 gallons (the remainder is shrinkage) of Product XX, for an additional processing cost of $30 per usable gallon. XX can be sold for $190 per gallon. Product Y can be processed further to yield 4,275 gallons of YY for an additional processing cost per usable gallon of $25. The product YY can be sold for $140 per gallon. Required: 1. Use the appropriate method to allocate the joint cost of $975,000 to the main products.

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To allocate the joint cost of 975000 to the main products Product X and Product Y we can use the rel... View the full answer