Scent of Money makes three products that can be sold at split-off processed furt

Question

Scent of Money makes three products that can be sold at split-off processed further and then sold. The joint cost for April 2013 is $1,080,000. The number of ounces in a bottle of each product is perfune, one; eau de toilette, two; and body splash, three. Assume that all products are processed further after split-off.

b. Assume that all products are processed further and completed. At the end of the period, the inventories are as follows: perfume, 600 bottles; eau de toilette, 1,600 bottles; and body splash, 1,680 bottles. Determine the values of the inventories based on answers obtained in (a). (Round per-unit costs to the nearest cent.)

Explanation / Answer

Solution:

(1).Per Unit Cost of 3 Products:

(A). Product Perfume:

Per Unit Cost of Perfume = $10,80,000 / 600 Bottles

= $ 1,800

(B). Per Unit Cost of Eau de toilette:

Per Unit Cost of Eau de toilette = $ 10,80,000 / 1600 Bottles

= $ 675

(C). Per Unit Cost of Body splash:   

   Per Unit Cost of Body splash = $ 10,80,000 / 1680 Bottles

= $ 642.85

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