Question

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	$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:

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.

	Allocated Joint Cost
Barlon	$
Selene
Plicene
Corsol
Total	$

2. Suppose that the products are weighted as shown below:

Barlon	1.0
Selene	2.0
Plicene	1.5
Corsol	2.5

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	$

Answer 1

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.

	Physical unit	Allocation percent	allocated joint cost
Barlon	1400	14%	17836
Selene	2600	26%	33124
Plicene	2500	25%	31850
Corsol	3500	35%	44590
Total	10000		127400

2) 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.

	Physical unit	Weight factor	Weighted no of units	Allocable percent	Allocated joint cost
Barlon	1400	1	1400	0.0733	9338
Selene	2600	2	5200	0.2723	34691
Plicene	2500	1.5	3750	0.1963	25009
Corsol	3500	2.5	8750	0.4581	58362
Total			19100		127400