Question

Johns Company manufactures products R, S, and T from a joint process. The following information is available: Product R S T Total Units produced 12,000 ? ? 24,000 Sales value at split-off ? ? $ 50,000 $ 200,000 Joint costs $ 48,000 ? ? $ 120,000 Sales value if processed further $ 110,000 $ 90,000 $ 60,000 $ 260,000 Additional costs if processed further $ 18,000 $ 14,000 $ 10,000 $ 42,000 Assuming that joint product costs are allocated using the relative-sales-value at split-off approach, what was the sales value at split-off for products R and S? Product R Product S A) $ 55,000 $ 75,000 B) $ 63,000 $ 81,000 C) $ 80,000 $ 70,000 D) $ 91,000 $ 83,000 E) $ 101,000 $ 92,000

Answer 1

Answer:

C) $ 80,000 $ 70,000

Explanation:

R = ($48,000/$120,000) x $200,000

=0.4×$200,000

= $80,000

S = $200,000-$50,000-$80,000

= $70,000

Therefore the sales value at split-off for products R is $80,000 and S $70,000