Question

The following questions relate to Kyle Company, which manufactures products KA, KB, and KC from a joint process. Joint product costs were $200,000. Additional information follows.

					If Processed Further
Product	Units Produced	Sales Value at Split-Off			Sales Values			Additional Costs
KA	83,500	$	260,000		$	340,000		$	53,000
KB	58,450		227,500			280,000			45,000
KC	25,050		162,500			250,000			28,000

Required:

a. Assuming that joint product costs are allocated using the physical quantities (units produced) method, what was the total cost of product KA (including $53,000 if processed further)?

REQUIRED A-

Total cost of product KA: ?

b. Assuming that joint product costs are allocated using the sales value at split-off (net realizable value method), what was the total cost of product KB (including the $45,000 if processed further)?

REQUIRED B-

Total cost of product KB- ?

Answer 1

Allocation of Joint cost at Physical units basis
Products		Units	% of total	Joint cost	Allocated JC
KA		83500	50%	200000	100000
KB		58450	35%	200000	70000
KC		25050	15%	200000	30000
TOTAL		167000			200000
Total cost of Product KA:
Share of Joint cost		100000
Add: Further processing cost	53000
Total cost of Product KA:	153000
Allocation of Joint cost at Physical units basis
Products	Sales value	Less: FPC	NRV	% of total	Joint cost	Allocated JC
KA	340000	53000	287000	39%	200000	77151
KB	280000	45000	235000	32%	200000	63172
KC	250000	28000	222000	30%	200000	59677
TOTAL			744000			200000
Total cost of Product KB:
Share of Joint cost		63172
Add: Further processing cost	45000
Total cost of Product KB:	108172