Sugar Cane Company processes sugar beets into three products. During April, the joint costs of processing were $120,000. Production and sales value information for the month were as follows:

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Sugar Cane Company processes sugar beets into three products. During April, the joint costs of processing were $120,000. Production and sales value information for the month were as follows:

 

Product Units Produced Sales Value at Splitoff Point Separable costs
Sugar 6,000 40,000 12,000
Sugar Syrup 4,000 35,000 32,000
Fructose Syrup 2,000 25,000 16,000

 

Required:

 

Determine the amount of joint cost allocated to each product if the sales value at splitoff method is used.

 

0

Answer:

 

Product Units Sales Value Percent Joint Cost Allocated
Sugar 6,000 $40,000 40% x $120,000 $48,000
Sugar Syrup 4,000 35,000 35% x 120,000 42,000
Fructose Syrup 2,000 25,000 25% x 120,000 30,000
     Total   $100,000 100%   $120,000

 

 

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