Acct434 Advanced Cost Management Week 4 Homework (Red Sauce Canning and Zenon Chemical)_Version 1

Reminder: Please make sure you review your questions with the questions in this tutorial. There will be times that the numbers are changed but you will be able to follow the solution by checking the worksheet cells for links and formulas.

Acct434 Advanced Cost Management
Week 4 Homework (Cost Allocation) - Version 1

Problem 1:
Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X2, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:
Product Cases Sales Value at Splitoff Point Separable Costs Selling Price
Catsup 125,000 $6.25 per case $3.20 per case $29.00 per case
Juice 175,000 $8.25 per case 5.20 per case $26.25 per case
Canned 250,000 $5.25 per case 2.70 per case $11.00 per case

Question: Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product (10 Points)

Problem 2:
Zenon Chemical, Inc. processes pine rosin into three products: turpentine, paint thinner, and spot remover. During June, the joint costs of processing were $380,000. Production and sales value information for the month is as follows:
Product Units Produced Sales Value at Splitoff Point
Turpentine 8,500 liters 85,000
Paint thinner 6,500 liters 55,250
Spot remover 4,000 liters 34,000

Question: Determine the amount of joint cost allocated to each product if the physical-measure method is used. (10 points)

Problem 3:
Oregon Lumber processes timber into four products. During February, the joint costs of processing were $380,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:
Product Board feet Sales Value at Splitoff Point Ending Inventory
2 x 4's 6,500,000 0.35 per board foot 650,000 bdft.
2 x 6's 3,500,000 0.45 per board foot 280,000 bdft.
4 x 4's 2,500,000 0.50 per board foot 100,000 bdft.
Slabs 1,500,000 0.20 per board foot 75,000 bdft.

Question: Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to three decimal places when necessary. (10 Points)
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