Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 19, Problem 3CMA
Breegle Company produces three products (B-40, J-60, and H-102) from a single process. Breegle uses the physical volume method to allocate joint costs of $22,500 per batch to the products. Based on the following information, which product(s) should Breegle continue to process after the split-off point in order to maximize profit?
- a. B-40 only
- b. J-60 only
- c. H-102 only
- d. B-40 and H-102 only
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Breegle Company produces three products (B-40, J-60, and H-102) from a single process.Breegle uses the physical volume method to allocate joint costs of $22,500 per batch to theproducts. Based on the following information, which product(s) should Breegle continue toprocess after the split-off point in order to maximize profit?
B-40 J-60 H-102Physical units produced per batch 1,500 2,000 3,200Market value per unit at split-off $10.00 $4.00 $7.25Cost per unit of further processing after split-off $3.05 $1.00 $2.50Market value per unit after further processing $12.25 $5.70 $9.75
a. B-40 onlyb. J-60 only
c. H-102 onlyd. B-40 and H-102 only
Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows.
DBB-1
DBB-2
DBB-3
Total
Units Sold
16,000
24,000
36,000
76,000
Price (after additional processing)
$ 65
$ 50
$ 75
Separable Processing cost
$ 110,000
$ 44,000
$ 66,000
$ 220,000
Units Produced
16,000
24,000
36,000
76,000
Total Joint Cost
$ 3,600,000
Sales Price at Split-off
$ 25
$ 35
$ 55
The amount of joint costs allocated to product DBB-1 using the sales value at split-off method is:
Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows.
DBB-1
DBB-2
DBB-3
Total
Units Sold
16,200
24,300
36,300
76,800
Price (after additional processing)
$ 65
$ 50
$ 75
Separable Processing cost
$ 112,000
$ 46,000
$ 68,000
$ 226,000
Units Produced
16,200
24,300
36,300
76,800
Total Joint Cost
$ 3,610,000
Sales Price at Split-off
$ 25
$ 35
$ 55
The amount of joint costs allocated to product DBB-1 using the physical measure method is:
Multiple Choice
$752,083.
$761,484.
$1,706,289.
$1,203,333.
$1,142,227.
Chapter 19 Solutions
Financial And Managerial Accounting
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