Purchase Solution

Compute Full Cost and Processing

Not what you're looking for?

Ask Custom Question

Joint Products, Inc., produces two joint products, X and V using a common input. These are produced in batches. The common input costs $8,000 per batch. To produce the final products (X and V), additional processing costs beyond the split-off point must be incurred. There are no beginning inventories. The accompanying data summarize the operations.

Products
X V
Quantities produced per batch 200 lbs. 400 lbs.
Additional processing costs per batch
beyond split-off $1,800 $3,400
Unit selling prices of completely
processed products $40/lb $10/lb
Ending inventory 2,000 lbs 1,000 lbs.

Required:
a. Compute the full cost of the ending inventory using net realizable value to allocate joint cost.
b. If the selling prices at the split-off point (before further processing) are $35 and $1 per pound of X and V respectively, what should the firm do regarding further processing? Show calculations.

Purchase this Solution
Solution Summary

This response determines the full cost of the ending inventory and the cost of further processing.

Solution Preview

1. Total common input cost = $8,000
X V
Ending Inventory 2000 1000
Selling Price $40 $10
Value $80,000 ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
Recent Feedback
  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
  • "try others as well please"
  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

View More Free Quizzes
Related BrainMass Solutions

  • Incremental Revenue Problem: Kaplan Company

    In this case, the only variable costs are the cost of merchandise sold and variable operating expenses. c.

  • Calculating quality-productivity ratio

    Compute the QPR if the company increased the production rate to 320 phones per week while reducing the processing cost to $42, reducing the rework cost to $12, and increasing the product yield of good quality telephones to 94%. a.

  • Activity Based Costing

    Compute the unit manufacturing cost of Deluxe and Executive filing cabinets by using activity based costing. 3.

  • Production Cost Report

    See attached file for full problem description. Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging.

  • Mission

    Compute the product costs for each main product in total and per unit for each alternative presented in requirement A.

  • Operating Income for Olive Oil Division of Better Food Co.

    Better Food Company recently acquired an olive oil processing company that has an annual capacity of 2,000,000 liters and that processed and sold 1,400,000 liters last year at a market price of $4 per liter.

  • The Cost to Produce One Tire and an Order

    Compute the cost of processing the rubber Amount of time processing rubber: 5 minutes per pound of rubber Minutes per hour 60 Portions of an hour to process rubber 0.083333333 hours per pound of rubber Payroll cost per hour:

  • Med Max - activity based costing

    Compute Med Max's customer margin for City General and County General. (Hint: Do not overlook the $30,000 cost of goods sold that Med Max incurred serving each hospital.) (Loss amount should be indicated with a minus sign.

  • Solex Company

    The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Additional Processing Cost Sales Value X $ 45,000 $ 82,000 Y $ 41,000 $ 156,000 Z

View More Related Solutions