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accessible website, in whole or in part.
b.
c.
Joint
Sales
Add’l
NRV at
Joint
Product
Value
Cost
Split-Off
Percent*
Cost*
Premium
$30,000
$28,500
73
$11,665
Good
15,000
4,200
10,800
27
4,315
$39,300
100
$15,980
*rounded
d.
Raw Material Inventory
15,000
Cash (A/P)
15,000
To record purchase of peaches
Work in Process Inventory—Clean & Sort
15,980
Raw Material Inventory
15,000
Wages Payable
700
Manufacturing Overhead
280
To record joint processing cost
Work in Process Inventory—Packaging (Premium)
11,665
Work in Process Inventory—Cutting (Good)
4,315
Work in Process Inventory—Clean & Sort
15,980
To transfer joint cost to Packaging and Cutting
Work in Process Inventory—Cutting (Good)
2,000
Various accounts
2,000
To record cutting and canning costs for good peaches
Work in Process Inventory—Packaging (Good)
6,315
Work in Process Inventory—Cutting (Good)
6,315
To move good peaches from Cutting to Packaging
336 Chapter 11
Work in Process Inventory—Packaging (Premium)
1,500
Work in Process Inventory—Packaging (Good)
2,200
Various accounts
3,700
To record packaging and delivery costs
Finished Goods Inventory (Premium)
13,165
Work in Process Inventory—Packaging
(Premium)
13,165
To record completed production of premium peaches
Finished Goods Inventory (Good)
8,515
Work in Process Inventory—Packaging (Good)
8,515
To record completed production of good peaches
Cash
4,500
Various accounts
500
Other Income
4,000
To record sale of fair peaches
e.
Total cost
$15,980
Estimated NRV of scrap
(4,000)
Joint cost to allocate
$11,980
Joint
Sales
Add’l
NRV at
Joint
Product
Value
Cost
Split-Off
Percent*
Cost*
Premium
$30,000
$1,500
$28,500
73
$ 8,745
Good
15,000
4,200
10,800
27
3,235
$39,300
100
$11,980
*rounded
f.
Raw Material Inventory
15,000
Cash (A/P)
15,000
To record purchase of peaches
Work in Process Inventory—Clean & Sort
15,980
Raw Material Inventory
15,000
Wages Payable
700
Manufacturing Overhead
280
To record joint cost
Work in Process Inventory—Packaging (Fair)
4,000
Work in Process Inventory—Clean & Sort
4,000
To recognize by-product
Work in Process Inventory—Packaging (Premium)
8,745
Work in Process Inventory—Cutting (Good)
3,235
Work in Process Inventory—Clean & Sort
11,980
To allocate joint cost
Work in Process Inventory—Cutting (Good)
2,000
Various accounts
2,000
To record cutting cost for good peaches
Chapter 11 337
Work in Process Inventory—Packaging (Good)
5,235
Work in Process Inventory—Cutting (Good)
5,235
To move good peaches from Cutting to Packaging
Work in Process Inventory—Packaging (Premium)
1,500
Work in Process Inventory—Packaging (Good)
2,200
Work in Process Inventory—Packaging (Fair)
500
Various accounts
4,200
To record packaging cost
Finished Goods Inventory (Premium)
10,245
Finished Goods Inventory (Good)
7,435
Finished Goods Inventory (Fair)
4,500
Work in Process Inventory—Packaging (Premium)
10,245
Work in Process Inventory—Packaging (Good)
7,435
Work in Process Inventory—Packaging (Fair)
4,500
To move completed production to finished goods
49. a. 2,500 × ($2.50 – $1.00) = 2,500 × $1.50 = $3,750
Personal Training
Apparel
Gross revenues
$ 753,000
$289,000
Separate costs:
Cost of goods sold
(194,850)
Labor
(231,000)
(33,250)
Supplies
(151,300)
(700)
Equipment depreciation
(165,000)
(1,200)
Administration
(103,000)
(3,700)
Net realizable value
$ 102,700
$ 55,300
65%
35%
e.
Personal Training
Apparel
Gross revenues
$ 753,000
$ 289,000
Separate costs:
Cost of Goods Sold
(194,850)
Labor
(231,000)
(33,250)
Supplies
(151,300)
(700)
Equipment depreciation
(165,000)
(1,200)
Administration
(103,000)
(3,700)
Joint cost
(51,350)
(27,650)
Operating income
$ 51,350
$ 27,650
338 Chapter 11
accessible website, in whole or in part.
50. a. Joint cost = $44,200 + $33,800 = $78,000
b. 56,000 gallons of output in Dept. 1:
c. 33,600 gallons of input to Dept. 3:
d. Sales value (6,720 × $0.05) $336
Distribution expense (90)
NRV $246
e.
Joint
Sales
Total
Separate
Product
Gallons
Price
Sales
Costs
NRV
Juice
22,400
$5.25
$117,600
$9,620
$107,980
Marmalade
26,880
3.45
92,736
6,204*
86,532
*$6,450 – $246
f.
Joint
Joint
Product
NRV
Percent
Cost
Juice
$107,980
56% (rounded)
$43,680
Marmalade
86,532
44% (rounded)
34,320
$194,512
100%
$78,000
Chapter 11 339
accessible website, in whole or in part.
g.
Joint
Separate
Total Inv.
Value of
Product
Costs
Cost %
End. Inv.
Juice
$43,680
$9,620
$53,300 0.15
$7,995.00
Marmalade
$34,320
$6,204
$40,524 0.15
$6,078.60
51. a.
By-Product Inventory—Corma
150,000
Work in Process Inventory—Zilla (5,000 × $30)
150,000
To record completed production of by-product
b.
By-Product Inventory—Corma (5,000 $45)
225,000
Various accounts
50,000
Work in Process Inventory—Zilla
175,000
To record completed production of by-product
(Alternative)
Work in Process Inventory—Corma
50,000
Various accounts
50,000
To record production of by-product
Work in Process Inventory—Corma
175,000
Work in Process Inventory—Zilla
175,000
To record reduction of main product for NRV of
by-product
By-Product Inventory—Corma
225,000
Work in Process Inventory—Corma
225,000
To record completed production of by-product
c.
Sales value of Zilla at split-off (70 × 5,000 × $3.50)
$1,225,000
(89%)*
Sales value of Corma at split-off (5,000 × $30)
150,000
(11%)*
$1,375,000
*rounded
Total joint costs
$875,000
Proportion of Corma sales value at split-off
0.11
Joint cost assignable to Corma
$ 96,250
Work in Process Inventory—Corma
96,250
Work in Process Inventory—Zilla
778,750
Various accounts
875,000
To allocate joint cost
Work in Process Inventory—Corma
50,000
Various accounts
50,000
To record separate processing costs of Corma
Finished Goods Inventory—Corma
146,250
Work in Process Inventory—Corma
146,250
To record completed production of Corma
340 Chapter 11
52. a.
Joint process cost:
Direct material
$40,000
Direct labor
23,400
Overhead
10,000
Total
$73,400
Less by-product NRV
(4,600)
Amount to be allocated
$68,800
Allocation on the basis of sales value at split-off:
Product
Sales Value
Proportion*
Allocation
Tenderloin
$132,000
0.55
$37,840
Roast
86,000
0.36
24,768
Ham
22,400
0.09
6,192
$240,400
1.00
$68,800
*rounded
Allocation on the basis of pounds produced:
Product
Pounds
Proportion*
Allocation
Tenderloin
8,600
0.26
$17,888
Roast
13,400
0.41
28,208
Ham
10,800
0.33
22,704
32,800
1.00
$68,800
*rounded
Sales Value Approach:
Product
Allocation
Units
Unit Cost*
Units in EI
EI Value
Tenderloin
$37,840
6,440
$5.88
1,000
$5,880
Roast
24,768
16,740
1.48
2,600
3,848
Ham
6,192
8,640
0.72
1,000
720
Physical Pounds Approach:
Product
Allocation
Unit Cost*
Units in EI
EI Value
Tenderloin
$17,888
6,440
$2.78
1,000
$2,780
Roast
28,208
16,740
1.69
2,600
4,394
Ham
22,704
8,640
2.63
1,000
2,630
have a higher selling price than others. Pounds are, however, an unchanging measure
of output, while the value of money changes as the purchasing power of the mone-
tary unit changes.
cause the allocation would make the products appear to be unprofitable.