Principles of Cost Accounting Van Derbeck 16th Edition, chapter 6 problem E6-13
ID: 2492201 • Letter: P
Question
Principles of Cost Accounting Van Derbeck 16th Edition, chapter 6 problem E6-13 The solution that is given I am not able to make sense of it. I have the first half of the problem done but need help with the second half.
a. Relative Sales Basis Products A B C Inventory 1. Number of units 1,000 500 500 2. Unit sale price $20 $200 $160 3. Sales value, (1) x (2) $20,000 $100,000 $80,000 4. Percent of sales value 10% 50% 40% 5. Allocation of joint cost of $20,000 $2,000 $10,000 $8,000 6. Allocated joint cost per unit (5) ÷ (1) $100 $200 $300 7. Units in ending inventory 200 4,000 4,800 8. Joint costs included in ending inventory valuation (6) x (7) $200 $4,000 $4,800 $9,000
Adjusted Sales Basis Products A B C Inventory 1. Number of units 2. Unit sale price 3. Sales value, (1) x (2) 4. Less costs after split-off 5. Sales value at split-off, (3) - (4) 6. Percent sales value 7. Allocation of joint cost of $20,000 8. Allocated joint cost per unit (7) ÷ (1) 9. Units in ending inventory 10. Joint costs included in ending inventory valuation (8) x (9)
Explanation / Answer
Answer
a. Relative Sales Basis Products A B C Inventory
1. Number of units 1,000 500 500
2. Unit sale price $20 $200 $160
3. Sales value, (1) x (2) $20,000 $100,000 $80,000
4. Percent of sales value 10% 50% 40%
5. Allocation of joint cost of $20,000 $2,000 $10,000 $8,000
6. Allocated joint cost per unit (5) ÷ (1) $ 2 $ 20 $ 16 (I have corrected figure)
7. Units in ending inventory 100 200 300 (I have corrected figure)
8. Joint costs included in ending inventory valuation (6) x (7) $200 $4,000 $4,800 $9,000 (Total)
Assume that Product C can be sold for $200 a unit if it is processed after split-off at a cost of $25 a unit. Compute that amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their adjusted sales values.?
Adjusted Sales Basis Products A B C Inventory
Figures in $
Particulars
A
B
C
Total
1. Number of units
1000
500
500
2. Unit sale price
20
200
200
3. Sales value, (1) x (2)
20000
100000
100000
4. Less costs after split-off
0
0
12500
(25*500)
5. Sales value at split-off, (3) - (4)
20000
100000
87500
207500
6. Percent sales value
9.64%
48.19%
42.17%
100.00%
7. Allocation of joint cost of $20,000
1927.71
9638.55
8433.73
20000
8. Allocated joint cost per unit (7) ÷ (1)
1.93
19.28
16.87
9. Units in ending inventory
100
200
300
10. Joint costs included in ending inventory valuation (8) x (9)
192.77
3855.42
5060.24
9108.43
Figures in $
Particulars
A
B
C
Total
1. Number of units
1000
500
500
2. Unit sale price
20
200
200
3. Sales value, (1) x (2)
20000
100000
100000
4. Less costs after split-off
0
0
12500
(25*500)
5. Sales value at split-off, (3) - (4)
20000
100000
87500
207500
6. Percent sales value
9.64%
48.19%
42.17%
100.00%
7. Allocation of joint cost of $20,000
1927.71
9638.55
8433.73
20000
8. Allocated joint cost per unit (7) ÷ (1)
1.93
19.28
16.87
9. Units in ending inventory
100
200
300
10. Joint costs included in ending inventory valuation (8) x (9)
192.77
3855.42
5060.24
9108.43
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.