Oak Products produces two joint products (A and B). Prior to the
split-off point, the company incurs costs of $5,840. Product A
weighs 29 pounds, and Product B weighs 116 pounds. Product A sells
for $103 per pound, and Product B sells for $35 per pound.
Based on relative sales values at the split-off point, allocate
joint costs to Products A and B. (Round relative sales
value proportion to 4 decimal places eg.0.4525 and final answers to
0 decimal places.)
PRODUCT A
PRODUCT B
Answer | |||
Calculation of allocation of joint cost : | |||
Product | Sales value | Allocated cost | |
Product A | 29*103=2987 | 5840*2987/7047 | $ 2,475 |
Product B | 116*35=4060 | 5840*4060/7047 | $ 3,365 |
Total | $ 7,047 | $ 5,840 | |
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