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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.

2 Answer

  • 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:

    = [tex]40,000:35,000:25,000[/tex]

    = [tex]8:7:5[/tex]

    On adding we get,

    = [tex]8+7+5[/tex]

    = [tex]20[/tex]

    hence,

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

    Sugar,

    = [tex]150000\times \frac{8}{20}[/tex]

    = [tex]60,000[/tex] ($)

    Sugar syrup,

    = [tex]150000\times \frac{7}{20}[/tex]

    = [tex]52,500[/tex] ($)

    Fructose syrup,

    = [tex]150000\times \frac{5}{20}[/tex]

    = [tex]37,500[/tex] ($)

  • The joint cost of sugar, sugar syrup, and fructose syrup is $60,000, $52,500, and $37,500 respectively.

    What is the sales value at the split-off method?

    The process where joint costs are assigned to joint products based on the sales value of the products at the split-off point.

    Given:

    Joint costs of processing=$150,000

    Product          Units                Sales ValueSplitoff Point    Separablecosts

    1. Sugar              $6,000                       $40,000                          $12,000  

    2. Sugar Syrup   $4,000                       $35,000                           $32,000

    3. Fructose Syrup $2,000                    $25,000                           $16,000

    The ratio of sale value=

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

    = 8 : 7 : 5

    On adding we get,

    = 8+7+5

    = 20

    The amount of joint cost allocated to each product on basis of the Sales Value of Split-off Point will be:

    1. Sugar= 1,50,000 X 8/20

    =$60,000

    2. Sugar syrup,= 1,50,000 X 7/20

    =$52,500

    3. Fructose syrup= 1,50,000 X 5/20

    =$37,500

    Therefore, the joint cost for each product on sales value at a split-off method for sugar, sugar syrup, and fructose syrup is $60,000,$52,500, and - respectively.

    Learn more about sales value at the split-off method here:

    https://brainly.com/question/15993499

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