Give the journal entries to record the following events for Juniper LLP. Juniper

Question

Give the journal entries to record the following events for Juniper LLP. Juniper records all costs associated with by-products. A by-product with an estimated value of $370 was removed from the Cutting Department. The by-product was further processed at a cost of S210 for materials, $300 for labor, and $125 for overhead. The finished by-product was sold for $975 cash. Brock Company makes two joint products from a single process. It allocates the common costs on the relative sales value basis. During processing in June, 150,000 units of HR2 were produced and 50,000 units of MX1 were produced. HR2 sells for $.40 per unit and MX1 sells for $.80 per unit.' The common cost in June was $40,000. Calculate the per unit and total joint cost to be allocated to each product.

Explanation / Answer

3)

Journal Entries:

Debit By-Products inventory $370

Credit Work in Process Inventory $370

Debit By-Products inventory $635

Credit Materials $210

Credit Labor $300

Credit Overhead $125

Debit Cash $975

Credit Other Revenue $975

Debit Cost of goods sold - others $1005

Credit By Product inventory $1005

( 370+210+300+125)

4)

Total joint cost for June = $40000

Sales value ratio of Product HR2 and MX1 = 150000 * 0.40 : 50000 * 0.80 = 60000 : 40000 = 3 : 2

Total joint cost allocated to each product in the ratio 3:2 = $24000 : $16000

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