Knowee
Questions
Features
Study Tools

The Mallak Company produced three joint products at a joint cost of $181,600. Two of these products were processed further. Production and sales were:Product Weight Sales Additional Processing CostsP 417,000 pounds $ 333,600 $ 250,200Q 180,000 pounds 54,000 0R 180,000 pounds 315,000 180,000If the estimated net realizable value method is used and product Q is accounted for as a main product, how much of the joint costs would be allocated to product R?Note: Do not round intermediate calculations.Multiple Choice$90,000$81,667$78,889$102,500

Question

The Mallak Company produced three joint products at a joint cost of 181,600.Twooftheseproductswereprocessedfurther.Productionandsaleswere:ProductWeightSalesAdditionalProcessingCostsP417,000pounds181,600. Two of these products were processed further. Production and sales were:Product Weight Sales Additional Processing CostsP 417,000 pounds 333,600 250,200Q180,000pounds54,0000R180,000pounds315,000180,000IftheestimatednetrealizablevaluemethodisusedandproductQisaccountedforasamainproduct,howmuchofthejointcostswouldbeallocatedtoproductR?Note:Donotroundintermediatecalculations.MultipleChoice 250,200Q 180,000 pounds 54,000 0R 180,000 pounds 315,000 180,000If the estimated net realizable value method is used and product Q is accounted for as a main product, how much of the joint costs would be allocated to product R?Note: Do not round intermediate calculations.Multiple Choice90,00081,66781,66778,889$102,500

...expand
🧐 Not the exact question you are looking for?Go ask a question

Solution

To solve this problem, we first need to calculate the net realizable value (NRV) for each product. The NRV is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion and disposal.

  1. Calculate the NRV for each product:

    For product P: Sales - Additional Processing Costs = 333,600−333,600 - 250,200 = 83,400ForproductQ:Sales−AdditionalProcessingCosts=83,400 For product Q: Sales - Additional Processing Costs = 54,000 - 0=0 = 54,000 For product R: Sales - Additional Processing Costs = 315,000−315,000 - 180,000 = $135,000

  2. Calculate the total NRV:

    Total NRV = NRV of P + NRV of Q + NRV of R = 83,400+83,400 + 54,000 + 135,000=135,000 = 272,400

  3. Calculate the proportion of each product's NRV to the total NRV:

    For product P: 83,400/83,400 / 272,400 = 0.306 For product Q: 54,000/54,000 / 272,400 = 0.198 For product R: 135,000/135,000 / 272,400 = 0.496

  4. Allocate the joint costs to each product based on the proportions calculated in step 3:

    For product P: 0.306 * 181,600=181,600 = 55,610 For product Q: 0.198 * 181,600=181,600 = 35,957 For product R: 0.496 * 181,600=181,600 = 90,033

So, the joint costs allocated to product R would be approximately $90,000.

This problem has been solved

Similar Questions

The Mallak Company produced three joint products at a joint cost of $124,000. Two of these products were processed further. Production and sales were:Product Weight Sales Additional Processing CostsP 312,000 pounds $ 266,000 $ 212,000Q 112,000 pounds 42,000 0R 112,000 pounds 202,000 112,000What is the net income of Mallak Company if the estimated net realizable value method of joint cost allocation is used?

DEF Corporation engages in a joint production process that incurs total costs of $400,000. This process results in the creation of two products: Product M and Product N. The production quantities and net realizable values per unit are as follows:Product M: 8,000 units sold for $7 per unitProduct N: 12,000 units sold for $4 per unitUsing the net realizable value method of apportionment, determine the cost per unit of Product M.Question 1Answera.$23.07b.$91.50c.$26.92d.$92.86

An oil refinery company engages in a joint production process that incurs total costs of $800,000. This process results in the creation of three different products: Product A, Product B, and By-product C. The production quantities are as follows:Product A: 100,000 unitsProduct B: 50,000 unitsBy-product C: 20,000 unitsBy-product C is sold for $3 per unit.Using the physical method of apportionment, determine the cost per unit of Product A.Question 13Answera.$4.70b.$4.93c.$5.33d.$4.35

A manufacturing company produces Product P, which has the following cost components per unit:Direct materials: $15Direct labor: $8Direct expenses: $5Variable production overhead: $6Variable selling expense: $7Fixed production overhead: $10Calculate the inventory valuations for Product P according to marginal costing and absorption costing.Question 2Answera.MC: $51 and AC: $44b.MC: $41 and AC: $44c.MC: $34 and AC: $44d.MC: $34 and AC: $51

Fundamentals of Cost and Management Accounting (Study Text) 251 | P a g e Product A Product B Units of output 2,000 8,000 Price per unit Rs 5 Rs 2.50 Required: Calculate the cost of sales, and gross profit for products A and B assuming: (i) Joint costs are apportioned by market value (ii) Joint costs are apportioned by production units.

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.