Sales-Value-at-Split-off Method Alomar Company manufactures four products from a

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 $60,000 Direct labor 36,000 Overhead 26,000 At the split-off point, a batch yields 1,700 barlon, 2,300 selene, 2,200 plicene, and 4,000 corsol. All products are sold at the split-off point: barlon sells for $18 per unit, selene sells for $22 per unit, plicene sells for $30 per unit, and corsol sells for $38 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.

Explanation / Answer

Answer

Products Yield at split off point (in units) Sale rate per unit at split off point Sale Value Barlon 1700 18 30600 Selene 2300 22 50600 Plicene 2200 30 66000 Corsol 4000 38 152000 Allocation of joint costs using the sales-value-at-split-off method Products Cost formula Allocated costs Barlon 122000*30600 / 299200 12477 Selene 122000*50600 / 299200 20632 Plicene 122000*66000 / 299200 26912 Corsol 122000*152000 / 299200 61979

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