Sales-Value-at-Split-off Method Pagilla Company manufactures four products-andol

Question

Sales-Value-at-Split-off Method

Pagilla Company manufactures four products-andol, incol, ordol,and exsol-from a joint production process. The joint costs for onebatch are as follows:

At the split-off point, a batch yields 1,000 andol, 1,500 incol,2,500 ordol, and 3,000 exsol. All products are sold at thesplit-off point: Andol sells for $20 per unit; incol sells for $75per unit; ordol sells for $64 per unit, and exsol sells for $22.50per unit.

Allocate the joint costs using the sales-value-at-split-offmethod.

Direct materials $56,300 Direct labor 28,000 Overhead 15,700

Explanation / Answer

I overlooked the Sales-value and used Sale Priceinstead. Make necessary correction as follows :
Allocate the joint costs using the sales-value-at-split-offmethod. Andol $ Incol $ Ordol $ Exsol $
Workings:                               Andol               Incol            Ordol            Exsol            Total ========                            =============================================== Sales Price Perunit                    $20                  $75               $64               $22.50      $181.50 Batch yield at split-offpoint       1,000              1,500            2,500             3,000 Sales value at split-offpoint      $20,000        $112,500      $160,000         $67,500     $360,000                                              ______________________________________________________ Joint CostAllocation                                                                                                 ============== DirectMaterials     (a)                $3,111        $17,500        $24,889         $10,500         $56,000 Directlabors        (b)                $1,556         $8,750        $12,444           $5,250          $28,000 Overheads            (c)                  $872         $4,906         $6,978           $2,944          $15,700                                               ______________________________________________________ Total Allocated JointCosts       $5,539       $31,156        $44,311          $18,694         $99,700                                              =================================================    (a)    56,000 x 20/ 360  -others values can be obtained accordingly (b)   28,000 x 20 / 360 - others valuescan be obtained accordingly (c)   15,700 x 20 / 360 - others values canbe obtained accordingly Andol $ Incol $ Ordol $ Exsol $

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.