Reference no: EM132745802
Question - Oxnard Corporation processes two products from a joint process. Each product may be sold at the splitoff point or procesessed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. The following information was available for the month of September:
Direct materials processed: 5,000 gallons (4,000 gallons of good product)
Production: Product A 3,000 gallons
Product B 1,000 gallons
Sales: Product A 3,000 gallons at $1.50 per gallon
Product B 500 gallons at $1.60 per gallon
The cost of purchasing 5,000 gallons of direct materials and processing it up to the split-off point to yield a total of 4,000 gallons of good products was $5,000.
Product A may be processed further to yield 2,800 gallons (the remainder is shrinkage) of a special product: Product A1; for an additional processing cost of $300 per usable gallon.
Product A1 can be sold for $1.90 per gallon.
Product B may be processed further to yield 900 gallons (the remainder is shrinkage) of a special product: Product B1; for an additional processing cost of $180 per usable gallon. Product B1 can be sold for $1.70 per gallon.
There are no beginning and ending inventory balances.
Required - Calculate all ratios and percentages to 4 decimal places, for example, 33.3333%, and round all dollar amounts to the nearest whole dollar.
1. Allocate the joint product costs and then compute the cost per unit using each of the following methods:
a. Physical measure
b. Sales value at split-off
c. Net realizable value
d. Constant gross margin percentage
2. Calculate the total gross margin and the gross margin percentage for each product.
3. Which product, if any, do you think should have been processed beyond the split-off point. Why?
4. "What's the big concern about learning four different methods of cost allocation for joint products? The total cost does not change, and the real question that needs answering is whether to further process joint products or sell right away. Besides, the firm uses Just in time inventory, so there aren't any ending inventories to cost." Required: Comment on these ideas.
|
Compute the current ratio based on walker balance sheet
: At December 31, 2019, Michelle Walker Corporation reported current assets of $344,340 and current liabilities of $192,700. The following items may have been.
|
|
What the appropriate treatment on the bank reconciliation
: The bank for $6,180 is incorrectly recorded on the company's books for $6,810, the appropriate treatment on the bank reconciliation would be to
|
|
Bottlenecks in simple manufacturing process
: Explain the concepts of setup time, utilization time, production scheduling, and bottlenecks in a simple manufacturing process
|
|
What entry does mc company make upon receipt of the check
: MC Company sells merchandise on account for $8,000 to LN Company, What entry does MC Company make upon receipt of the check?
|
|
Calculate the total gross margin
: Product B1; for an additional processing cost of $180 per usable gallon. Product B1 can be sold for $1.70 per gallon. Calculate the total gross margin
|
|
What gross profit would be
: What Gross profit would be? Sales Returns and Allowances 78,000. Operating Expenses € 270,000. Sales Discounts 36,000. Sales Revenue 900,000
|
|
Explain life cycle of supply chain
: Diagram and explain life cycle of supply chain. Explain, and provide examples of, the models organizations use to manage forecasting, planning, and inventory.
|
|
Identify the key account at risk of misstatement
: It further appears Parmalat Ltd has been struggling to recruit and retain skilled factory workforce. As a result, Parmalat Ltd decided to reward the staff.
|
|
Seven stages of six sigma implementation-envisioning
: Seven stages of Six Sigma implementation: envisioning, strategizing, developing, implementing, improving, sustaining, and abandoning.
|