Sherlock company _ Allocation of Joint Costs

Problem V

Sherlock company 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 (bdft = board foot):

		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.

Required:

Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Record your answers in the Tables below. You do not have to show your work (calculations). Fill-in all of the cells below but not the cells noted with “xxxxxxx.” Round to 3 decimal places when necessary and you can omit $ signs.

Answer:

Product	Board feet	Sales Value	Percent	Joint Cost	Allocated
2 x 4's	6,000,000
2 x 6's	3,000,000
4 x 4's	2,000,000
Slabs	1,000,000
Xxxxxxx	Xxxxxxxx	xxxxxxxxxx	xxxxxxx	xxxxxxxxxx	xxxxxxxxxxx
Totals	Xxxxxxxxx		100%	xxxxxxxxxxx

Product	Fraction of Production in Inventory	Allocated	Inventory value
2 x 4's	500,000/6,000,000 ×
2 x 6's	250,000/3,000,000 ×
4 x 4's	100,000/2,000,000 ×
Slabs	50,000/1,000,000 ×
Xxxxxxxx	xxxxxxxxxxxxxxxxxxxxxxx	xxxxxxxx	xxxxxxxxxxx
Total	xxxxxxxxxxxxxxxxxxxxxxx	xxxxxxxx

11 years ago

Report issue

Sherlock company _ Allocation of Joint Costs

NOT RATED

Purchase the answer to view it

sherlock_company___allocation_of_joint_costs.docx