Asked by Bryson Winder on Jul 08, 2024
Verified
A company puts four products through a common production process.This process costs $100,000 each year.The four products can be sold when they emerge from this process at the "split-off point," or processed further and then sold.Data about the four products for the coming period are:
Determine which products should be sold at the split-off point and which should be processed further.
Split-off Point
The stage in a process costing system where products that have been produced jointly up to a certain point are then subsequently processed or sold separately.
Process Costs
Costs that are incurred in the production process, often relating to the manufacturing of goods, which typically include labor, materials, and overhead expenses.
Productive Process
The procedures involved in creating a product or service, encompassing everything from the acquisition of raw materials to the manufacture, labor, and overhead costs.
- Examine the consequences of specific order decisions regarding profit levels and the functioning of standard operations.
Verified Answer
Stroller: 20,000 lb.* $42/lb.= $840,000; Walker: 10,000 lb.* $28/lb.= $280,000;Jogger: 5,000 lb.* $58/lb.= $290,000; Runner: 5,000 lb.* $22/lb.= $110,000
**Sales value at split off:
Stroller: 20,000 lb.* $28/lb.= $560,000; Walker: 10,000 lb.* $7/lb.= $70,000
Jogger: 5,000 lb.* $36/lb.= $180,000; Runner: 5,000 lb.* $18/lb.= $90,000
Learning Objectives
- Examine the consequences of specific order decisions regarding profit levels and the functioning of standard operations.
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