IPS operates a factory, which produces the MiniY and the MiniX. During September

Question

IPS operates a factory, which produces the MiniY and the MiniX. During September 20X8, the factory produced 3200 units of MiniY and 3000 units of MiniX. The joint cost related to the operation was $3,000,000. MiniX sells for $27,100 per unit and MiniY sells for $25,000 per unit. Allocate the joint costs using the relative sales values of MiniY and MiniX. Question 6: With the costs that you calculate, what is the profit or loss associated with MiniY? NOTE: Assume that the variable and fixed costs mentioned in Step 5 are also applicable to Step 6 when calculating the profit or loss for MiniY

Explanation / Answer

MinX Sales = 3000*27100 = 81,300,000

MinY Sales = 3200*25000 = 80,000,000

Total sales = 161,300,000

% MinX Sales = 813/1613

% MinY Sales = 800/1613

Cost for MinX = 3,000,000*(813/1613) = 1,512,089.27

Cost for MinY = 3,000,000*(800/1613) = 1,487,910.73

Min Y profit = 80000000 - 1487910.73 = 78,512,089.27

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.