Problem 1 - Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X2, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:
|
Product
|
Cases
|
Sales Value at Splitoff Point
|
Separable Costs
|
Selling Price
|
|
Catsup
|
100,000
|
$6 per case
|
$3.00 per case
|
$28 per case
|
|
Juice
|
150,000
|
8 per case
|
5.00 per case
|
25 per case
|
|
Canned
|
200,000
|
5 per case
|
2.50 per case
|
10 per case
|
Question: Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.
Problem 2 - Zenon Chemical, Inc. processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $240,000. Production and sales value information for the month is as follows:
|
Product
|
Units Produced
|
Sales Value at Splitoff Point
|
|
Turpentine
|
6,000 liters
|
$60,000
|
|
Paint thinner
|
6,000 liters
|
50,000
|
|
Spot remover
|
3,000 liters
|
25,000
|
Question: Determine the amount of joint cost allocated to each product if the physical-measure method is used.
Problem 3 - Oregon Lumber processes timber into four products. During January, the joint costs of processing were $280,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:
| |
|
Sales Value at
|
|
Product
|
Board feet
|
Splitoff Point
|
Ending Inventory
|
|
2 x 4's
|
6,000,000
|
$0.30 per board foot
|
500,000 bdft.
|
|
2 x 6's
|
3,000,000
|
0.40 per board foot
|
250,000 bdft.
|
|
4 x 4's
|
2,000,000
|
0.45 per board foot
|
100,000 bdft.
|
|
Slabs
|
1,000,000
|
0.10 per board foot
|
50,000 bdft.
|
Question: Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to three decimal places when necessary.