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Alomar Co: Cost Account Sales Value at Split Off Method

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Sales-Value-at-Split-off Method

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

DIRECT MATERIALS $67,900
DIRECT LABOR 34,000
OVERHEAD 25,500

At the split-off point, a batch yields 1,400 barlon, 2,600 selene, 2,500 plicene, and 3,500 corsol. All products are sold at the split-off point: barlon sells for $15 per unit, selene sells for $20 per unit, plicene sells for $26 per unit, and corsol sells for $35 per unit.

Required:

Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

Allocated Joint Cost

Barlon $
Selene
Plicene
Corsol
Total $

(Note: The total of the allocated cost does not equal $127,400 due to rounding error.)

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Solution Summary

Computations illustrated for you. See computations in excel, attached. Click in cells.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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