Question

Blake’s Blacksmith Co. produces two types of shotguns, a 12-gauge and 20-gauge. The shotguns are made through a joint production process that ultimately produces 30 12-gauge shotguns and 30 20-gauge shotguns and costs a total of $3,600 per batch. After the split-off point, each type of shotgun goes through an additional crafting process before it is sold. The additional production process of the 12-gauge shotgun costs $30 per gun, after which it is sold for $182 per gun. The additional production process of the 20-gauge shotgun costs $28 per gun, after which it is sold for $154 per gun. Determine the amount of joint production costs allocated to each type of shotgun using the physical units method. Joint Product Allocation 12-gauge shotgun = 20-gauge shotgun = Totals=

Answer 1

Answer:

  $1800 of joint production costs are allocated to each type of shotgun. That is $60 per shotgun.

Step-by-step explanation:

Equal numbers of shotguns of each type are produced in the joint process, so the joint process cost is allocated equally between the types. The allocation for each shotgun is ...

  $3600/(30+30) = $60 . . . . allocated cost per shotgun of each type