Evaluate the profitability of each product

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Reference no: EM133289

Question :

Kingline Company produces three products in a joint process costing $1,000,000. Product 1 sells for $0.35/ounce after further processing which $0.10/ounce. Product 2 sells for $1.00/ounce at splitoff. Product 3 sells for $0.65/ounce after further processing which costs $0.25/ounce. This period, 25,000 pounds of Product 1, 5o,ooo pounds of Product 2, and 30,000 pounds of Product 3 resulted from the joint process (there are 16 ounces in a pound).

The joint process also results in 3,800 gallons of a byproduct that sells for $8/gallon. Kingline uses the net realizable value of its products to allocate joint costs, and accounts for byproducts at the time of production.

Evaluate the profitability of each product after allocating joint costs.

1. $11,208.88

2. 89,670.37

3. 21,520.96

Reference no: EM133289

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