Question

CMA, adapted)
Berger Company manufactures products Delta, Kappa, and Omega from a joint process. Production,
sales, and cost data for July follow.
■ Problem 17–30
Joint Cost Allocation;
Missing Data
(LO 17-4)
1. Omega, joint cost
allocation: $9,000
3. Kappa, net realizable
value: $20,000
Delta Kappa Omega Total
Units produced ......................................................................................................... 4,000 2,000 1,000 7,000
Joint cost allocation ................................................................................................. $36,000 ? ? $ 60,000
Sales value at split-off .............................................................................................. ? ? $15,000 $100,000
Additional costs if processed further ....................................................................... $ 7,000 $ 5,000 $ 3,000 $ 15,000
Sales value if processed further .............................................................................. $70,000 $25,000 $20,000 $115,000
Required:
1. Assuming that joint costs are allocated using the relative-sales-value method, what were the joint
costs allocated to products Kappa and Omega?
2. Assuming that joint costs are allocated using the relative-sales-value method, what was the sales
value at split-off for product Delta?
3. Use the net-realizable-value method to allocate the joint production costs to the three products.

Please Kindly show how you get each number. Thank you

Answer 1

1.

Joint cost allocated to Omega = ($15,000/100,000) * 60,000 = $9,000

Joint cost allocated to Kappa = $60,000 - 36,000 - 9,000 = $15,000

2.

Sales value at split off for Delta = ($36,000 / 60,000) * 100,000 = $60,000

3.

Product	Sales value after further processing (a)	Further processing cost (b)	Net realizable value (a)-(b)	Weightage	Joint cost allocation
Delta	$70,000	$7,000	$63,000	0.63	$37,800
Kappa	25,000	5,000	20,000	0.20	12,000
Omega	20,000	3,000	17,000	0.17	10,200
Total	$115,000	$15,000	$100,000	1.00	$60,000