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120.
Franklin Corporation has three operating departments (Fabricating, Assembly, and
Finishing) and two service departments (Custodial and Administrative). The following
information has been provided:
Custodial
Admin
Fabricating
Assembly
Finishing
Dept Costs
$250,000
$400,000
—
—
—
# employees
10
—
80
100
60
Sq ft
—
15,000
30,000
35,000
20,000
Custodial:
Square
feet
Administrative:
Number of
employees
121.
The Joplin Company conducts a simple chemical process in Department #1, which
produces three separate items: A, K, and H. A is processed further in Department #2. K is
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processed further in Department #3. Product H is a by-product, to be accounted for by the
cost reduction method. The following information relates to September:
Department #1’s costs $420,000.
Department #2’s costs $150,000.
Department #3’s costs $60,000.
A: 25,000 pounds completed; 23,500 pounds sold for $12 per pound.
K: 75,000 pounds completed; 70,000 pounds sold for $7.50 per pound.
H: 10,000 pounds completed; 10,000 pounds sold for $1.50 per pound. (There are shipping
costs of $0.30 per pound.)
There were no September 1st inventories.
Required:
Prepare a schedule to show the computation for the unit costs per pound for Products A,
K, and H assuming Joplin uses the estimated net realizable value method to allocate joint
costs to the main products.
122.
Simpson Manufacturing Enterprises uses a joint production process that produces three
products at the split-off point. Joint production costs during April were $720,000. The
company uses the net realizable value method for allocating joint costs. Product
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information for April was as follows:
Product
R
S
T
Gallons produced
2,500
5,000
7,500
Sales prices per
gallon:
At the split-off
$100
$80
$20
After further
processing
$150
$115
$30
Costs to process
after split-off
$150,000
$150,000
$100,000
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123.
Clean-Burn, Inc. is a small petroleum company that acquires high-grade crude oil from
low-volume production wells owned by individuals and small partnerships. The crude oil is
processed in a single refinery into Two Oil, Six Oil, and impure distillates. Clean-Burn does
not have the technology or capacity to process these products further and sells most of its
output each month to major refineries. There were no inventories on November 1.
Crude oil acquired and placed into
production
$5,000,000
Direct labor and related costs
2,000,000
Refinery overhead
3,000,000
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124.
Smokey Enterprises buys Liquid Charcoal for $0.80 a gallon. At the end of processing in
department 1, the liquid charcoal splits off into Products U, V, and W. Product U is sold at
the split-off point, with no further processing. Products V and W require further processing
before they can be sold; Product V is processed in Department 2, and Product W is
processed in Department 3. Following is a summary of costs and other related data for the
most recent accounting period:
Department
1
2
3
Cost of liquid
charcoal
$104,000
Direct labor
16,000
45,000
65,000
Manufacturing
overhead
10,000
27,000
49,000
Products
U
V
W
Gallons sold
20,000
30,000
50,000
Gallons on hand end
of period
15,000
0
15,000
Sales in dollars
$30,000
$96,000
$142,000
There were no beginning inventories and there was no liquid charcoal on hand at the end
of the period. All gallons on hand in ending inventory were complete as to processing.
Smokey uses the estimated net realizable value method of allocating joint costs.
Required:
a. Determine the product cost for U, V, and W, assuming the physical quantity method is
used to allocate joint costs.
b. Determine the product cost for U, V, and W, assuming the net realizable value method
is used to allocate joint costs.
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125.
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126.
The Marketplace Corporation produces two consumer products and a by-product. Zylon is
ready for sale after split-off, while Qytol must be further processed. The by-product is a
heavy residue in the bottom of the vat. The net realizable value of the by-product is
credited against the $565,000 joint cost of the Heating Department. Volume and cost data
for February is as follows:
Gallons
Produced
Selling
Price
Additional
Processing
Zylon
200,000
$2.00
0
Qytol
400,000
1.10
$40,000
By-Product
5,000
0.50
0
127.
The Delicious Canning Company processes tomatoes into ketchup, tomato juice, and
canned tomatoes. During the summer, the joint costs of processing the tomatoes were
$420,000. There was no beginning or ending inventories for the summer. Production and
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sales value information for the summer were as follows:
Product
Cases
Additional Costs
Selling Price
Ketchup
100,000
$3.00 per case
$28 per case
Juice
150,000
5.00 per case
$25 per case
Canned
200,000
2.50 per case
10 per case
128.
The Joplin Company conducts a simple chemical process in Department #1, which
produces three separate items: A, K, and H. A is processed further in Department #2. K is
processed further in Department #3. Product H is a by-product, to be accounted for by the
other revenue method. The following information relates to September:
Department #1’s costs $420,000.
129.
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130.
Voorhees Manufacturing Corporation produces three products in a joint process.
Additional information is as follows:
O
P
Q
Total
Units
produced
42,000
50,000
8,000
100,000
Sales value
at split off
$250,000
$50,000
$20,000
$320,000
Additional
costs if
processed
further
$18,000
$30,000
$10,000
$58,000
Sales value
if processed
further
$290,000
$70,000
$25,000
$385,000
Joint costs
$300,000
Product
weights in
pounds
84,000
150,000
8,000
242,000
O
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131.
Ridgeline Enterprises produces three products in a joint process. Products A and B were
processed further. Additional information is as follows:
A
B
C
Total
Units
produced
42,000
50,000
8,000
100,000
Sales value
at split-off
$250,000
$30,000
$20,000
$300,000
Additional
costs if
processed
further
$18,000
$30,000
$0
$48,000
Sales value
if processed
further
$290,000
$70,000
$0
$360,000
Joint Costs
$200,000
Product
Weight in
pounds
168,000
300,000
32,000
500,000
B
C
Total
Product
168,000
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132.
Geneva Powder Company produces body powders in batches. Each type of powder can be
sold in its current condition or processed further and specialized for high priced
department stores. Data concerning the various products appear below. Joint processing
costs are $200,000.
Type of
Powder
Number
of
Pounds
Price
per
Pound
at
Split-
Off
Further
Processing
Costs
Price
after
Processing
Further
Cosmetic
Powder
200,000
$10
$150,000
$11.50
Medicated
Powder
400,000
$8
$60,000
$8.40
Baby
Powder
50,000
$5
$80,000
$5.50
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Powder
Powder
133.
Indicate whether the following costs would be treated as joint-product costs or costs
incurred after the split-off point. Use J for joint product costs and S for costs incurred after
the split-off point.
(a)
Cost of planting, growing and picking pineapples in a
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pineapple factory
(b)
Costs of processing apples at a cider mill
(c)
Costs of processing pineapples into juice and sliced
pineapples
(d)
Depreciation on oil rigs for an oil producer
(e)
Costs of running a fishing boat used to catch varieties of
fish, lobsters, etc.
(f)
Labor costs, of “shucking” clams to produce clam chowder
(g)
Costs of chopping onions to be used in spaghetti sauce
and soup in a food manufacturer
(h)
Cost of processing rejected meat parts into hot dogs in a
meat processing plant
(i)
Cost of processing wood and sawdust into particle board in
a sawmill
(j)
Ingredients and packaging added to batches of spaghetti in
(g) above
__________
(k)
Costs of refining gasoline in (d) above
(l)
Processing of pulp into paperboard in a paper
manufacturer
(m)
Utility costs of processing timber for a lumber
manufacturer
134.
The Macon Industries started the production of K1 (its main product) and S2 (its by-
product) on January 2, 2016. During 2016, 7,500 units of K1 and 1,500 units of S2 were
produced. In 2016, 6,000 units of K1 and 1,000 units of S2 were sold at $57.00 and $1.10
per unit, respectively. Production was halted at the end of 2016 and the inventory was sold
in 2017 at the normal selling prices. The joint production costs were $240,000 and are