13. Clarissa Explains-lt-All, Inc. produces instructional videos. Products X, Y
ID: 2530464 • Letter: 1
Question
13. Clarissa Explains-lt-All, Inc. produces instructional videos. Products X, Y and Z stem from a joint process. Joint product costs were $60,000. Additional information for Products X, Y and Z are as follows: Sales Value at Split-Off $40,000 $35,000 $25,000 Additional Processing Costs $9,000 $7,000 $5,000 Product Units Produced 6,000 4,000 2,000 If joint product costs are allocated using the physical measure (units produced) approach, what were the total production costs for Product X? A) $39,000 B) $27,000 C) $15,000 D) $81,000 If joint product costs are allocated based on relative sales values at split-off, what were the total production costs for Product Y? A) $33,000 B) $28,000 C) $20,000 D) $81,000Explanation / Answer
Total Production costs for Product X – Based on Units Produced
= Proportionate joint cost + Additional Processing cost
= [ $60,000 x 6000/12000 ] +$9,000
= $39,000
Total Production costs for Product Y - Based on Sales Value
= Proportionate joint cost + Additional Processing cost
= [ $60,000 x 35000 / 100000 ] +$7,000
= $28,000
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