Help please! Sales value at split off point: Product 10: 60,600 Product 12: 15,8
ID: 2530997 • Letter: H
Question
Help please! Sales value at split off point: Product 10: 60,600 Product 12: 15,800 Product 14 150,300Cost to process further: 10: 100,300 12: 29,000 14: 150,300
Sales value after further processing: 10: 189,200 12: 34,300 14: 214,100 Exercise 20-10 Stahi Inc, produces three separate products fromacomon proscng 100,100 tach of ee produts can bwoi at the spliin r cn be cesses burther and then eit for and selling price data for a recent perod Cost to 39,200 4,300 214,100 29,200 Product 12 Product 14 15,800 54,400 Determine total net inceome it al Determine total net a negative Caiculate Product 12 Product 14
Explanation / Answer
Firstly, you have written Sale Value at split off point for Product 14 as 150,300 which in the question is 54,400 & Secondly you have written Cost to further process for Product 12 as 29,000 which in the question is 29,200.
So, I am giving answer as per the Data shown in the Image.
Ans. 1 : Net Income if all products sold at Split off Point :
Sales Value of Product 10 : $60,600
+ Sales Value of Product 12 : $15,800
+ Sales Value of Product 14 : $54,400
(-) Joint Cost : $100,100
Profit : $30,700
Ans. 2 : Net Income if all products sold after further processing :
Sales Value of Product 10 : $189,200
+ Sales Value of Product 12 : $34,300
+ Sales Value of Product 14 : $214,100
(-) Further Proc. Cost of Product 10 : $100,300
(-) Further Proc. Cost of Product 12 : $29,200
(-) Further Proc. Cost of Product 14 : $150,300
(-) Joint Cost : $100,100
Profit : $57,700
Ans. 3 : Incremental Profit / (Loss) & Determining Point of Sale of Product :
Calculation of Joint Cost Allocation of $100,100 on the basis of Relative Sale Value at Split off point :
Product 10 : $100,100 * $60,600 / $130,800 : $46,377
Product 12 : $100,100 * $15,800 / $130,800 : $12,092
Product 14 : $100,100 * $54,400 / $130,800 : $41,631
Product wise Profit if Sold at split off point :
Product wise Profit if Sold after Further Processing :
Statement showing Incremental Profit / (Loss) :
So, as seen from the Incremental Profit / (Loss), following to be done :
Product 12 : Sale at Split off Point;
Product 10 & 14 : Further Process & then sale.
Ans. 4 : Net Income if Option as per Ans. 3 is considered :
Profit of Product 10 (Further Process) : $42,523
Profit of Product 12 (Sale at Split off) : $3,708
Profit of Product 14 (Further Process) : $22,169
Total Net Income / Profit : $68,400
Hope this will be helpful!!!!
Particulars Product 10 Product 12 Product 14 Sales Value $60,600 $15,800 $54,400 (-) Joint Cost Allocation $46,377 $12,092 $41,631 Profit / (Loss) $14,223 $3,708 $12,769Related Questions
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