Fisher Chemicais processes a liquld into three outputs Sigma, Tau, and Upsion Si

Question

Fisher Chemicais processes a liquld into three outputs Sigma, Tau, and Upsion Sigma accounts for 58 percent of the net realzatble value at the spi off point, Tau accounts for 28 percent and The jons costs total $043,.000, ir Upslon is accourted for as a by-product, its s68.000 net resalizable value at spit.-offis credhed to theturing c costs using method 1 described in the text, wich credits the by-product's net realizable value as a reduction in the joint costs Required: a. What are the allocated joint costs for the three outputs 1. it Upslion is accourted for as a joint product? Sgma 2.? Upalon ts accounted for as a by-product? (Do rot round intermediate calculations) for as a

Explanation / Answer

Total Cost 100% $            6,43,000 Sigma 58% $            3,72,940 Tau 28% $            1,80,040 Upsion 14% $                90,020 answer =2) When we can take any product as by - product than this product have the no cost and net realizable value will be deducted from the total cost. Total Cost = $       6,43,000 Less: Relizable Value od Upison $          68,000 Net Cost Available for Sigma and Tau = $       5,75,000 Now, total Cost 86% $            5,75,000 Sigma 58% Tau 28% CALCULATION OF THE COST OF SIGMA AND TAU AMOUNT AMOUNT (IN Round Off) Sigma Cost = $ 575,000 X 58 / 86 = $ 3,87,790.70 $            3,87,791 Tau Cost = $ 575,000 X 28 / 86 = $ 1,87,209.30 $            1,87,209 Total $       5,75,000 $            5,75,000

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