The SYT Corporation produces two consumer products and a by-product. Zylon is re

Question

The SYT Corporation produces two consumer products and a by-product. Zylon is ready for sale after split-off, while Qytol must be further processed. The by-product is a heavy residue in the bottom of the vat. The net realizable value of the by-product is credited against the $565,000 joint cost of the Heating Department. Volume and cost data for February is as follows:

Gallons Selling Additional
Produced Price Processing
Zylon 200,000 $2.00 0
Qytol 400,000 1.10 $40,000
By-Product 5,000 0.50 0

Required:
a. Allocate the Heating Department cost to the products using the physical quantities method.
b. Allocate the Heating Department cost to the products using the workback method.

Explanation / Answer

Produced Price Processing Zylon 200,000 $2.00 0 Qytol 400,000 1.1 $40,000 By-Product 5,000 0.5 0 a) Produced Price Processing Total Zylon 200,000 $2.00 0 400,000 Qytol 400,000 1.1 $40,000 440000+40000 By-Product 5,000 0.5 0 2500 Total 882,500 b) Produced Price Processing Total Zylon 200,000 $2.00 0 400,000 Qytol 400,000 1.1 $40,000 440000-40000 By-Product 5,000 0.5 0 2500 Total 802,500

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