Question

Joint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated. These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards. The joint production process costs a total of $710 per batch. Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places.

Answer 1

Answer:

Products                Physical Units    Weight      Allocation of Joint Cost

washed                             45               45/100        0.45 x 710 = 319.5

stained                              35               35/100        0.35 x 710 = 248.5

pressure treated              20                20/100       0.20 x 710 = 142

Explanation:

Joint Cost Allocation—Physical Units Method Board-It, Inc., produces the following types of 2 × 4 × 10 wood boards: washed, stained, and pressure treated.

These products are produced jointly until they are cut. One batch produces 45 washed boards, 35 stained boards, and 20 pressure treated boards.

The joint production process costs a total of $710 per batch.

Using the physical units method, allocate the joint production cost to each product. Round your answers to two decimal places.

Products                Physical Units    Weight      Allocation of Joint Cost

washed                             45               45/100        0.45 x 710 = 319.5

stained                              35               35/100        0.35 x 710 = 248.5

pressure treated              20                20/100       0.20 x 710 = 142