Problem III. Joint Products Special Products Manufacturing Company manufactures two skin care lotions, Smooth Skin...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Problem III. Joint Products Special Products Manufacturing Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $420,000 for a standard production run that generates 180,000 pints of Smooth Skin and 120,000 pints of Silken Skin. Smooth Skin sells for $2.40 per pint, while Silken Skin sells for $3.90 per pint. Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to the lotions using the relative sales value method? (12 points) 2. If no separable costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to the lotions using the physical measure method? (8 points) 3. If separable processing costs beyond the split-off point are $1.40 per pint for Smooth Skin and $0.90 per pint for Silken Skin, how much of the joint cost of each production run is allocated to the lotions using a net realizable value method? (10 points) 4. Explain the difference between joint products and by-products. (5 points) 5. What are some of the ethical issues of cost allocation? (5 points)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
