Fletcher Fabrication, Inc., produces three products by a joint production proces
ID: 2516152 • Letter: F
Question
Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three products appear. Product A is sold at the split-off point with no further processing. Products B and C require further processing before they are sold. Product B is processed in Department Y, and product C is processed in Department Z. The company uses the estimated net realizable value method of allocating joint production costs. Following is a summary of costs and other data for the quarter ended June 30.
No inventories were on hand at the beginning of the quarter. No raw material was on hand at June 30. All units on hand at the end of the quarter were fully complete as to processing.
This is all the informations given, there's nothing else to be undated.
Fletcher Fabrication, inc, produces hree peoducts by a joint production process at the split-of point with no further processing. Products 8 and C require turther Raw materials are put into production in Department X. and at the end of processing in thes department three products appear Phoduct A s sold processing before they are sold. Product B is processed in Department Y, and product C is processed in Department 2 the compary sses the estimated net realizabie alue method of allocating joint production costs. Following is a summary of costs and other data for the quarter ended June 30 No Inventories were on hand at the beginning of the quarter No raw material was on hand at June 30. A units on hand at the end of the quarter were fuly complete as to processing Pounds on hand at June 30 8,000 40.,000 48 550 $ 302,400 501,500 280 ,500 Required: a. Desermine the tollowing (1) Estmated net reaiza amounts for each product (Do not itle value used for allocating joint costs round intermediate calculations) (2) Joint costs alocated to each of the three productsExplanation / Answer
Part a)
1)
The estimated net realizable values are calculated as below:
____
2)
The value of joint costs allocated to three products is determined as below:
____
3)
The cost of goods sold for three products is arrived as follows:
____
4)
The value of ending inventory for each of the three products is calculated as follows:
____
Part 2)
The incremental income is determined as follows:
____
Part 3)
Yes, the company should process product A further.
____
Notes:
1) There can be a slight difference in final answers on account of rounding off as well as image issues.
Product A Product B Product C Total Selling Price Per Pound A (46,550/19,000) 2.45 C (401,500/73,000) 5.50 Multiply by Pounds Produced A (46,000 + 19,000) 65,000 C (73,000 + 40,000) 113,000 Gross Sales Value 159,250 302,400 621,500 Less Costs of Separate Processing A 0 B (91,000 + 31,700) 122,700 C (280,500 + 106,000) 386,500 Estimated Net Realizable Value at Splitoff Point $159,250 $179,700 $235,000 $573,950 Percentage of Total 27.75% 31.31% 40.94%Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.