ent FULL SCREEN PRINTER VERSION BACK NEXT Exercise 21-12 A company manufactures
ID: 2540176 • Letter: E
Question
ent FULL SCREEN PRINTER VERSION BACK NEXT Exercise 21-12 A company manufactures three products using the same production process. The costs incurred up to the split-off point are $206,100. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows. Number of Selling Price Selling Price Additional Product Units Produced at Split-Off after Processing Processing Costs 4,130 5,910 2,030 $10.17 11.39 19.47 $15.47 16.21 22.76 $15,799 20,836 9,539 (b1) Determine the incremental profit (loss) of each product(s). (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses eg. (45 Product D Product E Product F (b2) Which product(s) should be processed further and which should be sold at the split-off point? Product DExplanation / Answer
A Incremental Profit or (Loss)
$ 58,160.23
($206,100 * $42,002 /$148,841)
$ 93.210.82
($206,100 * $67,315 /$148,841)
$ 54,728.95
($ 206,100 * $39,524 /$148,841)
,B.
Product D = Processed Further as incremental Profit of $ 6,090
Product E = Processed Further as incremental Profit of $ 7,650.20
Product F = Sale at Split off because there is Incremental Loss of $ 2860.30
Product D Product E Product F Total Number of Unit Produced (A) 4,130 5,910 2,030 Selling Price At Split Off (B) $ 10.17 $ 11.39 $ 19.47 Sales Value At Split Off (C = A*B) $ 42,002 $ 67,315 $ 39,524 $ 148,841 Cost Allocation at split Off (D)$ 58,160.23
($206,100 * $42,002 /$148,841)
$ 93.210.82
($206,100 * $67,315 /$148,841)
$ 54,728.95
($ 206,100 * $39,524 /$148,841)
Profit / (Loss) After Split Off (E =C-D) ($ 16,158.13) ($ 25,895.92) ($ 15,204.85) Additional Processing Cost (Given) (F) $ 15,799 $ 20,836 $ 9,539 Sales Price After processing (G) $ 15.47 $ 16.21 $ 22.76 Sales Value After processing (H = A* G) $ 63,891.1 $ 95,801.1 $ 46,202.8 Profit / (Loss) after Processing (I= H-D-F) ($ 10,068.13) ($ 18,245.72) ($ 18,065.15) Incremental Profit / (Loss) (J= I - E) $ 6,090 $ 7,650.20 ($ 2,860.30)Related Questions
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