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

100,000

$6 per case

$3.00 per case

$28 per case

Juice

150,000

8 per case

5.00 per case

25 per case

Canned

200,000

5 per case

2.50 per case

10 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.  

 

Problem 2 - Zenon Chemical, Inc. processes pine rosin into three products: turpentine, paint thinner, and spot remover.  During May, the joint costs of processing were $240,000.  Production and sales value information for the month is as follows:

Product

Units Produced

Sales Value at Splitoff Point

Turpentine

6,000 liters

$60,000

Paint thinner

6,000 liters

50,000

Spot remover

3,000 liters

25,000

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

 

Problem 3 - Oregon Lumber processes timber into four products.  During January, the joint costs of processing were $280,000.  There was no inventory at the beginning of the month.  Production and sales value information for the month is as follows:

 

 

 

Sales Value at

Product

Board feet

Splitoff Point

Ending Inventory

2 x 4's

6,000,000

$0.30 per board foot

500,000 bdft.

2 x 6's

3,000,000

0.40 per board foot

250,000 bdft.

4 x 4's

2,000,000

0.45 per board foot

100,000 bdft.

Slabs

1,000,000

0.10 per board foot

50,000 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.  

 

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    Accounting Homework
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