PA10. LO 10.5 Calcion Industries produces two joint products, Y and Z. Prior to the split-off point, the company incurred costs of $36,000. Product Y weighs 25 pounds and product Z weighs 75 pounds. Product Y sells for $150 per pound and product Z sells for $125 per pound. Based on a physical measure of output, allocate joint costs to products Y and Z.
Solution
Product Y pounds:
Product Z pounds:
Total pounds:
Product Y allocation:
Product Z allocation:
Product Z 75 pounds
Product Y 25 pounds
Joint cost is $36,000
Joint cost allocated to product Y under physical measure of output method
= 36,000 × (25 / 100) = $9,000
Joint cost allocated to product Z under physical measure of output method
= 36,000 × (75 / 100) = $27,000
Under physical measure of output method $27,000 allocated to product Z and $9,000 is allocated to product Y. Product Y weighted under measure of output is 25% (25 / 100) and product Z weight is 75% (75 / 100).
Get Answers For Free
Most questions answered within 1 hours.