Reference no: EM132870834
Problem - Cane Company manufactures sugar cane until the split off point where it becomes products A. B, and C. Product A is sold at the split off point without any further processing. Products B and C require further processing to ?nish them before they can be sold. The following is a summary of costs and other related data for the year ending December 31, 2020.
Joint Costs Before Split-Off $300,00
Separable Costs - Product A $0
Separable Costs - Product B $152,000
Separable Costs - Product C $213,000
|
|
Litres Made
|
Selling Price
|
Units Sold
|
|
Product A
|
80,000
|
$1.25
|
35,000
|
|
Product B
|
70,000
|
$3.20
|
63,000
|
|
Product C
|
140,000
|
$3.15
|
91,000
|
There were no inventories on hand January 1. 2020, and there was no sugar cane on hand on December 31. 2020. All units of A, B. and C on hand at yearend were complete as to processing.
REQUIRED -
1. Allocate the total joint costs to products A, B. and C using the net realizable value method.
2. Calculate the full cost of producing one unit each of A. B, and C.
3. For each product (A, B, and C) calculate the dollar value of the cost of goods sold for 2020 E the ending inventory dollar value at December 31, 2020.