Deming & Sons manufactures four grades of lubricant, W-10, W-20, W-30, and W-40,

Question

Deming & Sons manufactures four grades of lubricant, W-10, W-20, W-30, and W-40, from a joint process. Additional information follows:

Required:

Assuming that total joint costs of $443,520 were allocated using the physical quantities method, what joint costs were allocated to each product? (Do not round intermediate calculations.)

If Processed Further Product Units Produced Sales Value at Split-Off Additional Costs Sales Values W-10 61,600 $ 368,000 $ 39,600 $ 402,000 W-20 44,000 316,000 31,600 368,000 W-30 35,200 212,000 21,200 264,000 W-40 35,200 160,000 13,200 176,000 176,000 $ 1,056,000 $ 105,600 $ 1,210,000

Explanation / Answer

Grades Joint costs allocation W-10 $                           155,232 =443520*(61600/176000) W-20 $                           110,880 =443520*(44000/176000) W-30 $                              88,704 =443520*(35200/176000) W-40 $                              88,704 =443520*(35200/176000) Total $                           443,520

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