Question

Sales-Value-at-Split-off 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 $75,000
Direct labor 35,000
Overhead 27,000

At the split-off point, a batch yields 1,400 barlon, 2,500 selene, 2,400 plicene, and 3,400 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $23 per unit, plicene sells for $26 per unit, and corsol sells for $39 per unit.

Required:

Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

Allocated Joint Cost
Barlon $
Selene
Plicene
Corsol
Total $

(Note: The total of the allocated cost may not equal actual total costs to due to rounding.)

Answer 1

Allocated Joint Cost

Barlon = $11,796

Selene = $28,150

Plicene = $30,934

Corsol = $65,750

TOTAL = $137,000

Products	Units	Selling price at split-off point	Sales Value	Allocation Rate	Total Joint Cost	Allocated Joint Cost
Barlon	1,400	17	$23,800	0.0861	$1,37,000	$11,796
Selene	2,500	23	$57,500	0.2081	$1,37,000	$28,510
Plicene	2,400	26	$62,400	0.2258	$1,37,000	$30,934
Corsol	3,400	39	$1,32,600	0.4800	$1,37,000	$65,760
TOTAL			$2,76,300	1.0000		$137,000

* Total Joint Cost

Total Joint Cost = Direct Materials + Direct Labor + Overhead

= $75,000 + 35,000 + 27,000

= $137,000