Question

Sugar Cane Company processes sugar beets into three products. During September, the joint costs of processing were $150,000. Production and sales value information for the month were as follows: Product Units Produced Sales Value at Splitoff Point Separable costs Sugar 6,000 $40,000 $12,000 Sugar Syrup 4,000 35,000 32,000 Fructose Syrup 2,000 25,000 16,000 Required: Determine the amount of joint cost allocated to each product if the sales value at splitoff method is used.

Answer 1

Answer:

The description as per the given question is described below.

Explanation:

The given value is:

Joint costs of processing,

= $150,000

According to the question,

The ratio of sale value will be:

= $40,000:35,000:25,000$

= $8:7:5$

On adding we get,

= $8+7+5$

= $20$

hence,

The amount of joint cost allocated to each product will be:

Sugar,

= $150000\times \frac{8}{20}$

= $60,000$ ($)

Sugar syrup,

= $150000\times \frac{7}{20}$

= $52,500$ ($)

Fructose syrup,

= $150000\times \frac{5}{20}$

= $37,500$ ($)