Question

Data pertaining to a company's joint production for the current period follows: L M Quantities produced...

Data pertaining to a company's joint production for the current period follows:

L M
Quantities produced 320 lbs. 160 lbs.
Market value at split-off point $ 8 /lb. $ 16 /lb.


Compute the cost to be allocated to Product L for this period's $756 of joint costs if the value basis is used. (Do not round intermediate calculations.)

Homework Answers

Answer #1
Answer:
Total market Value
           = ( 320 x $ 8 ) + ( 160 x $ 16 )
           =   $ 2,560 + $ 2,560
$ 5,120
Cost to be allocated to Product L
               = $ 756 x $ 2,560 / $ 5,120
               = $ 756 x 0.5
$ 378
Cost to be allocated to Product L   = $ 378
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