product physical-measure method

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. (10 points) 

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. (10 points)

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. (10 points)