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Physical Units 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 | $64,755 |
Direct labor | 35,387 |
Overhead | 27,256 |
At the split-off point, a batch yields 1,041 barlon, 2,290 selene, 2,394 plicene, and 4,683 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 $24 per unit, and corsol sells for $36 per unit.
Required:
1. Allocate the joint costs using the physical units method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar. Note: The total of the allocated cost does not equal to the one provided in the question data due to rounding error.
Allocated Joint Cost | ||
Barlon | $ | |
Selene | ||
Plicene | ||
Corsol | ||
Total | $ |
2. Suppose that the products are weighted as shown below:
Barlon | 1.3 |
Selene | 1.9 |
Plicene | 1.7 |
Corsol | 2.7 |
Allocate the joint costs using the weighted average method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar.
Allocated Joint Cost | ||
Barlon | $ | |
Selene | ||
Plicene | ||
Corsol | ||
Total | $ |
Total of joint costs = 127,398
1
Physical units | % of physical units | Allocated joint cost | |
Barlon | 1,041.00 | 10.002% | 12,742.25 |
Selene | 2,290.00 | 22.002% | 28,030.50 |
Plicene | 2,394.00 | 23.002% | 29,303.50 |
Corsol | 4,683.00 | 44.994% | 57,321.76 |
10,408.00 | 127,398.00 |
2
Units | Weight | Weighted average | % of weight | Allocated joint cost | |
Barlon | 1,041.00 | 1.30 | 1,353.30 | 6.037% | 7,690.52 |
Selene | 2,290.00 | 1.90 | 4,351.00 | 19.408% | 24,725.83 |
Plicene | 2,394.00 | 1.70 | 4,069.80 | 18.154% | 23,127.83 |
Corsol | 4,683.00 | 2.70 | 12,644.10 | 56.401% | 71,853.81 |
22,418.20 | 127,398.00 |
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