Question

Bennett Company produces two products from a joint process: A and C. Joint processing costs for this production cycle are $9,000. Yards Sales price per yard at split-off Disposal cost per yard at split-off Further processing per yard Final sale price per yard A 1,800 $7.00 $4.50 $1.50 $8.00 C 2,600 10.00 6.00 3.50 12.25 If A and C are processed further, no disposal costs will be incurred or such costs will be borne by the buyer. Refer to Bennett Company. Using sales value at split-off, what amount of joint processing cost is allocated to Product A (round to the nearest dollar)

Answer 1

Answer:

$2,938

Explanation:

Calculation to determine what amount of joint processing cost is allocated to Product A Using sales value at split-off,

First step is to calculate the Total for Product A and C

Product A 1,800* $7.00= $12,600

Product C 2,600* $10.00= $26,000

Total $38,600

($12,600+$26,000)

Now let calculate amount of joint processing cost is allocated to Product A

Joint processing cost is allocated to Product A=$(12,600/38,600)*$9,000

Joint processing cost is allocated to Product A = $2,938

Therefore Using sales value at split-off, what amount of joint processing cost is allocated to Product A is $2,938