Given for two joint products: Total X Y Total joint costs $800 ? ? Units produce

Question

Given for two joint products:

                                                     Total            X              Y

Total joint costs                               $800             ?                ?

Units produced                                  400 lbs      100 lbs      300lbs

Selling prices per unit at split off                         $7             $1

Separable costs if processed further   $400         $200          $200

Selling prices per unit if processed further            $8              $2

Questions:

Allocate joint costs under the sales value at split-off method (show your work)

Should Product X be processed beyond split-off? Why?

Explanation / Answer

Details Product X Product Y Total Units Produced (lb)                        100                         300                   400 Selling price/unit at Split Off                            7                              1 Sales revenue at Split Off                        700                         300               1,000 % of Sales Value 70% 30% Joint Cost Total                   800 Joint Cost Allocated in The ratio of Sales Value                        560                         240

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