Reference no: EM132899466

Enterprise

The Enterprise derives six different items from a single common production process. They are all produced simultaneously at the end of the process.
Four of these items are regarded as the ship's principal products; two are treated as by-products.

The following summarizes production and sales data for Star Date 2021.04

Costs of Separate Processing in Addition to Common Production Costs

	Units Produced	Units Sold	Variable per Unit	Fixed Costs($)	Final Unit Selling Price
Main Products AON BEON CEON DEON	100,000   50,000   75,000   25,000	90,000 45,000 70,000 25,000	$0.06 $0.10 $0.06 $0.07	5,000 4,000 9,000 3,000	0.70 0.90 1.50 2.20
By-Products FEON GEON	20,000   10,000	15,000 10,000	$0.04 $0.00	2,000    500	0.25 0.20

The company uses the Net Realizable Value method of allocating common costs.
Required:

a) Compute the common production costs to be allocated to main products, assuming common costs were $204,150 for Star Date 2021.04. (Show all calculations, round to nearest dollar.)

b) To prevent carry-thru errors (and to get sweet answers) assume common costs to be allocated for Star Date 2021.04 were $234,250 in total, after adjusting for by-products, and were allocated to the main products as follows:

AON $69 000 BEON $21 000 CEON $99 000 DEON $ 45 250 TOTAL $234,250

Compute the unit production costs of the main products for Star Date 2021.04, using the common cost allocation above (not your correct answers) and whatever other figures from above that you feel are necessary.

c. Compute the overall gross profit margin earned for the Enterprise, on actual sales made, assuming all the original data above the common costs allocated in part (b). (Ignore the original $204,150.)