Question

Deming & Sons manufactures four grades of lubricant, W-10, W-20, W-30, and W-40, from a joint process. Additional information follows:

					If Processed Further
Product	Units Produced	Sales Value at Split-Off			Additional Costs			Sales Values
W-10	43,400	$	260,000		$	27,800		$	283,000
W-20	31,000		223,000			22,300			260,000
W-30	24,800		149,000			14,900			186,000
W-40	24,800		112,000			9,300			124,000
	124,000	$	744,000		$	74,300		$	853,000

Required:

Assuming that total joint costs of $297,600 were allocated using the physical quantities method, what joint costs were allocated to each product? (Do not round intermediate calculations.)

Answer 1

Under physical quantities, Joint costs will be allocated to the individual products by dividing the Total Joint Costs by the Total Quantities Produced and multiplying that by the physical quantities produced by that individual product.

Hence, Computation of joint costs that will be allocated to each product, using the physcal quantities is as follows: