Scotland Beauty Products manufactures face cream, body lotion, and liquid soap in a joint manufacturing process. At the split-of

Question

3 years ago

7

Scotland Beauty Products manufactures face cream, body lotion, and liquid soap in a joint manufacturing process. At the split-of

f point, the company has 300 pounds of face cream, 200 pounds of body lotion, and 300 pounds of liquid soap and has incurred $200,000 in joint costs. Using the weighted average method, allocate the joint costs to (a) face cream with a weight factor of 1, (b) body lotion with a weight factor of 3, and (c) liquid soap with a weight factor of 1.

Business

2 answers:

Harrizon [31] · Answer 1 · 2022-03-16T16:14:46+03:00

Answer:

A) face cream = $50,000

B) body lotion = $100,000

C) liquid soap = $50,000

Explanation:

product quantity weight factor final quantity

face cream 300 1 300

body lotion 200 3 600

liquid soap 300 1 300

total 1,200

total joint costs = $200,000

joint cost per weighted pound = $200,000 / 1,200 = $166,67

allocated joint costs:

product final quantity cost per unit total

face cream 300 $166,67 $50,000

body lotion 600 $166,67 $100,000

liquid soap 300 $166,67 $50,000

total 1,200 $200,000

neonofarm [45] · Answer 2 · 2022-03-16T13:57:12+03:00

Answer: Face cream = 25/100 * $200000

= $50,000

Body lotion = 50/100 * $200000

= $100,000

Liquid soap = 25/100 * $200,000

= $50,000

Explanation:

Formula used:

Weight factors

Face cream =300

Body lotion = 200 * 3 = 600

Liquid soap = 300

Total weight factor = 1200 pounds

Percentage of total= Weights / Total weight factor *100

Face cream = 300/1200 * 100 = 25%

Body lotion = 600/1200 * 100 = 50%

Liquid soap = 300/1200 *100 = 25%

Allocation of cost= $200,000 × percentage of total

Face cream = 25/100 * $200000

= $50,000

Body lotion = 50/100 * $200000

= $100,000

Liquid soap = 25/100 * $200,000

= $50,000