Lecture 28

Lecture Overview Splitoff Point Joint Products and By-products Why Allocate Joint Products? Approaches to Allocating Joint Costs Sales Value at Splitoff Method

The Skantz Company manufactures three different products from a single raw material. A summary of production costs shows: No. of Units Market Value A20000$0.25 B C D Required: a)Distribute the total cost of $ each type of product using market value method. b)Calculate gross profit for each product, allocating the joint cost by the market value method. (there is no ending inventory left)

The Skantz Company manufactures three different products from a single raw material. A summary of production costs shows: No. of UnitsMarket Value Total Market Value % of Product to Market value Apportion ment of joint cost A20000$0.25 B C D Required: a)Calculate the total product cost of each type of product. b)Calculate gross profit for each product, allocating the joint cost by the market value method.

The Skantz Company manufactures three different products from a single raw material. A summary of production costs shows: No. of UnitsMarket Value Total Market Value % of Product to Market value Apportion ment of joint cost A20000$0.25$ %$3750 B C D $ %$ Required: a)Calculate the total product cost of each type of product. b)Calculate gross profit for each product, allocating the joint cost by the market value method.

Products ABCD Units Produced Sales Cost of Goods Sold Gross Margin Suppose if all of the products are not sold than how to calculate sales price and cost of goods sold

Products ABCD Sales$5000$45000$35000$75000 Cost of Goods Sold Gross Margin Suppose if all of the products are not sold than how to calculate sales price and cost of goods sold

Products ABCD Units Produced Sales units Sales Price$0.25$3.00$3.50 $5.00 Suppose if all of the products are not sold than how to calculate sales price and cost of goods sold

Products ABCD Units Produced Sales Sales Price$0.25$3.00$3.50 $5.00 Total Sales Cost of Goods Sold Gross Margin Suppose if all of the products are not sold than how to calculate sales price and cost of goods sold 3750/20000=0.1875*18000=3375

The Buildon Company produces three join products: A, B, C. total joint production cost for November was $ The units produced and unit sales prices at the split off point were: ProductsUnitsUnits sales price A6000$2.20 B C Required: allocation of the production cost, using: The market value method.

End of Lecture 28

The Skantz Company manufactures three different products from a single raw material. A summary of production costs shows: No. of UnitsMarket Value Total Market Value % of Product to Market value Apportion ment of joint cost A20000$0.25$ %$3750 B C D $ %$ Required: a)Calculate the total product cost of each type of product. b)Calculate gross profit for each product, allocating the joint cost by the market value method.

Products ABCD Sales$5000$45000$35000$75000 Cost of Goods Sold Gross Margin Products ABCD Units Produced Sales Sales Price$0.25$3.00$3.50 $5.00 Total Sales Cost of Goods Sold Gross Margin Suppose if all of the products are not sold than how to calculate sales price and cost of goods sold 3750/20000=0.1875*18000=3375