Sales value and physical value allocation To-Go produces milk and sour cream from a jont process. During june, the company produced 192.000 quarts of milk and 152.000 pints of sour cream there are two pints in a quart) Sales value at split-off point w $301,920 for the milk and $142.080 for the sour cream. The milk was assigned $100,640 of the joint cost Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar a Using the sales value at split off approach, determine the total pont cost for june 0 D Asume instead, that the pot cost was allocated based on the number of quarts produced. What was the total joint cost incurred in june? 0

Sales value and physical value allocation To-Go produces milk and sour cream from a jont process. During june, the company produced 192.000 quarts of milk and 152.000 pints of sour cream there are two pints in a quart) Sales value at split-off point w $301,920 for the milk and $142.080 for the sour cream. The milk was assigned $100,640 of the joint cost Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar a Using the sales value at split off approach, determine the total pont cost for june 0 D Asume instead, that the pot cost was allocated based on the number of quarts produced. What was the total joint cost incurred in june? 0

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 16E

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Sales value and physical value allocation To-Go produces milk and sour cream from a joint process. During June, the company produced 432,000 quarts of milk and 342,000 pints of sour cream (there are two pints in a quart). Sales value at split-off point was $679,320 for the milk and $319,680 for the sour cream. The milk was assigned $226,440 of the joint cost. Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar. a. Using the sales value at split-off approach, determine the total joint cost for June. $ 0 b. Assume, instead, that the joint cost was allocated based on the number of quarts produced. What was the total joint cost incurred in June? $ 0
Strawberry Sweet Company makes a variety of jams and jellies. During June, 55,000 gallons of strawberry mash was processed at a joint cost of $40,000. This produced 42,000 gallons of preserve-grade mix and 4,000 gallons of Strawberry juice for jelly. The juice could be processed further into energy drinks, and the preserve mix could be processed further into ice cream flavoring. Information on these items is shown: A. Assume that the joint cost is allocated to the products based on the physical quantity of output of each product. How much joint cost should be assigned to each product? B. How much joint cost should be assigned to each product if the relative sales value allocation method is used? C. Which products should be processed further?
Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for 100 per case. There is a selling commission of 20 per case. The January direct materials, direct labor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Direct Materials Cost per Case Cream base Variable 100 ozs. 0.02 2.00 Natural oils Variable 30ozs. 0.30 9.00 Bottle (8-OZ-) Variable 12 bottles 0.50 6.00 17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case Mixing Variable 20 min. 18.00 6.00 Filling Variable 5 14.40 1.2 25 min. 7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed 600 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Supplies Fixed 660 19,560 Part ABreak-Even Analysis The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost: Month Case Production Utility Total Cost January 500 600 February 800 660 March 1,200 740 April 1,100 720 May 950 690 June 1,025 705 Instructions 1. Determine the fixed and variable portions of the utility cost using the high-low method. 2. Determine the contribution margin per ease. 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 4. Determine the break-even number of cases per month. Part BAugust Budgets During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at 100 per case for August. Inventory planning information is provided as follows: Finished Goods Inventory: Cases Cost Estimated finished goods inventory, August 1 300 12,000 Desired finished goods inventory, August 31 175 7,000 Materials Inventory: Cream Base (ozs.) Oils (ozs.) Bottles (bottles) Estimated materials inventory, August 1 250 290 600 Desired materials inventory, August 31 1,000 360 240 There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in tile cost per unit or estimated units per case operating data from January. Instructions 5. Prepare the August production budget. 6. Prepare the August direct materials purchases budget. 7. Prepare the August direct labor budget. Round the hours required for production to the nearest hour. 8. Prepare the August factory overhead budget. 9. Prepare the August budgeted income statement, including selling expenses. Part CAugust Variance Analysis During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the Beginning of the month. Actual data for August were as follows: Actual Direct Materials Price per Unit Actual Direct Materials Quantity per Case Cream base 0.016 per oz. 102 ozs. Natural oils 0.32 per oz. 31 ozs. Bottle (8 oz.) 0.42 per bottle 12.5 bottles Actual Direct Labor Rate Actual Direct Labor Time per Case Mixing 18.20 19.50 min. Filling 14.00 5.60 min. Actual variable overhead 305.00 Normal volume 1,600 cases The prices of the materials were different than .standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rale to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less titan standard. Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 12. Determine and interpret the factory overhead controllable variance. 13. Determine and interpret the factory overhead volume variance. 14. Why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,250 cases of production used in the budgets for parts (6) and (7)?
Standard Direct Materials Cost per Unit Billingsly Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (7,100 bars) are as follows: Ingredient Quantity Price Cocoa 600 Ibs. $1.25 per Ib. Sugar 120 Ibs. $0.50 per Ib. Milk 180 gal. $2.60 per gal. Determine the standard direct materials cost per bar of chocolate. Round to two decimal places. $ per bar
Lauren Inc. makes three products that can be sold at split-off or processed further and then sold. The joint cost for April is $2,592,000. Bottles of Sales Price Separate Cost Final Sales Output at Split-Off after Split-Off Price 48,000 $7.00 $2.50 $16.50 Eau de toilette 76,800 5.00 1.50 13.00 Body splash 67,200 5.00 2.00 12.00 Product Perfume The number of ounces in a bottle of each product is: perfume, one; eau de toilette, two; and body splash, three. Assume that all products are processed further after split-off. a. Allocate the joint cost based on the number of bottles, weight, and approximated net realizable values at split-off. Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar. Allocation by bottles Perfume Eau de Toilette Body Splash Total Allocation by weight Perfume Eau de Toilette Body Splash Total Allocation by approx NRV Perfume Eau de Toilette Body Splash Total b. Assume that all products are processed further and…
Y Company produces two joint products: Sweet and Sour. Joint cost is allocated using the net realizable value method at split-off point. Joint production cost is $70,000. Neither product is salable at split-off point. During May, the additional costs incurred beyond split-off point are as follows: Sweet $ 32,000 Sour $ 48,000 Production: Sweet: 3,200 units Sour: 1,600 units Selling prices: Sweet: $50.00 per unit Sour: $ 90.00 per unit What is the amount of joint cost allocated to Sweet and Sour using the NRV Method at split-off point. (Must show calculations or no credit) Joint cost allocated to Sweet: $_____________________________ Joint cost allocated to Sour:…
The JYD Company processes apples into pies, spread, and dressing. During the second quarter of 2021, the joint cost of processing the apples was P750,000. There were no beginning inventories for the quarter. Production and sales value information for the quarter were as follows: Assume the use of the estimated net realizable value method. Products Units Produced SV @ split-off Separable costs Final Selling Price Ending Units Pies 20,000 P12/unit P20/unit P35/unit 7,000 Spread 50,000 15/unit 10/unit 28/unit 24,000 Dressing 25,000 9/unit 8/unit 20/unit 10,000 The allocated joint cost for product Spread at the end of the quarter is: Group of answer choices c. P250,000 b. P450,000 d. Not given a. P150,000
The JYD Company processes apples into pies, spread, and dressing. During the second quarter of 2021, the joint cost of processing the apples was P750,000. There were no beginning inventories for the quarter. Production and sales value information for the quarter were as follows: Assume the use of the estimated net realizable value method. Products Units Produced SV @ split-off Separable costs Final Selling Price Ending Units Pies 20,000 P12/unit P20/unit P35/unit 7,000 Spread 50,000 15/unit 10/unit 28/unit 24,000 Dressing 25,000 9/unit 8/unit 20/unit 10,000 The total value of ending inventory at the end of the quarter is: Group of answer choices b. P1,140,000 d. P788,500 c. P721,500 a. P750,000
Keiffer Production manufactures three joint products in a single process. The following information is available for August: (See attached) Allocate the joint cost of $1,339,200 to the production based on the following: a. number of gallons. JP-4539 $ JP-4587 JP-4591 Total $ b. sales value at split-off. JP-4539 $ JP-4587 JP-4591 Total $ c. approximated net realizable values at split-off. JP-4539 $ JP-4587 JP-4591 Total $
Jackson Company manufactures one main product and two by-products, A and B. For April, the following data are available: Main By- Product Product A B Total Sales Rs. 75,000 Rs. 6,000 Rs. 3,500 Rs. 84,500 Manufacturing cost after separation Rs. 11,500 Rs. 1,100 Rs. 900 Rs. 13,500 Marketing and administrative expenses 6,000 750 550 7,300 Manufacturing cost before separation 37,500 Profit allowed for A and B is 15% and 12%, respectively. Required: 1. Calculate manufacturing cost before separation for by-products A and B, using the market value (reversal cost) method. 2. Prepare an income statement, detailing sales and costs for each product. 3. Comment on the reliability of costing by-products A and B in relation to the assignment of balance joint cost on main product.
Standard Direct Materials Cost per Unit Billingsly Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (7,100 bars) are as follows: Ingredient Quantity PriceCocoa 600 lbs. $1.25 per lb.Sugar 120 lbs. $0.50 per lb.Milk 180 gal. $2.60 per gal. Determine the standard direct materials cost per bar of chocolate. Round to two decimal places.
Evansville Company had the following transactions for the month. Number Cost of Units per Unit Purchase 2 $8,000 Purchase 9,000 Purchase 4 9,500 Calculate the gross margin for each of the following cost allocation methods, assuming Evansville sold just one unit of these goods for $12,000. Round your intermediate calculations and final answers to the nearest dollar amount. Gross Margin A. First-in, First-out (FIFO) $4 B. Last-in, First-out (LIFO) C. Weighted Average (AVG) When prices are rising (inflation), which costing method would produce the highest value for gross margin? First-in, First-out Last-in, First-out Weighted Average