Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated
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Question:
Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows:
1. Product X's sales value at the split-off point is?
2. Based solely on a relevant cost analysis, which of the three products should be processed by Walman beyond the split-off point?
| X | Y | Z | Total | | |||||||
Units produced | | 14,000 | | 10,000 | | 6,000 | | 30,000 | ||||
Allocated joint costs | $ | 204,000 | $ | 90,000 | $ | 66,000 | $ | 360,000 | ||||
Sales value at split-off | | ? | | 150,000 | | 110,000 | | 600,000 | ||||
Additional costs for further processing | | 38,000 | | 30,000 | | 22,000 | | 90,000 | ||||
Sales value if processed further | | 348,000 | | 185,000 | | 147,000 | | 680,000 |
Related Book For
Taxation for Decision Makers 2014
ISBN: 9781118654545
6th edition
Authors: Shirley Dennis Escoffier, Karen Fortin
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