. The Dairy coby Company processes unprocessed milk to produce two products: But
ID: 2712635 • Letter: #
Question
. The Dairy coby Company processes unprocessed milk to produce two products: Butter Cream and Condensed Milk. The following information was collected for the month of october:
The costs of purchasing the unprocessed milk and processing it up to the split off point to yield a total of 21,000 gallons of saleable product was $34,500. This is joint cost
Direct Materials processed 21000 gallons
Buttercream Condensed milk
Production (gallons) 9,375 11,625
Sales (gallons) 9,000 11,250
Sales ($ per gallon) $25 $55
Separable costs in total $10,125 $25,275
Requirements:
a) Allocate joint cost using sales-value at split off method.
b) Allocate joint cost using physical-measure method.
c) Allocate joint cost using net realizable method.
d) Allocate joint cost using gross-margin percentage.
Explanation / Answer
Calculation of Allocation of Joint cost Using sale value at Split off Method
= Total Joint Cost /Total sales *Product wise Sale
Calculation of Allocation of Joint cost Using Physical Measure Method
Calculation of Allocation of Joint cost Using Net Realizable Method
Calculation of Allocation of Joint cost Using Gross Margin Method
Butter Cream Condensed Milk Total Sales Galons 9000 11250 20250 Sales Per Galon $25.00 $55.00 Total Sales $225,000.00 $618,750.00 $843,750.00 Joint Costs $9,200.00 $25,300.00 $34,500.00Related Questions
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