# accounting help 8

Problem 1 – Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes.  During the summer of 20X2, the joint costs of processing the tomatoes were \$420,000.  There was no beginning or ending inventories for the summer.  Production and sales value information for the summer is as follows:

 Product Cases Sales Value at Splitoff Point Separable Costs Selling Price Catsup 100,000 \$6 per case \$3.00 per case \$28 per case Juice 150,000 8 per case 5.00 per case 25 per case Canned 200,000 5 per case 2.50 per case 10 per case

Question: Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.  (10 points)

Problem 2 – Zenon Chemical, Inc. processes pine rosin into three products: turpentine, paint thinner, and spot remover.  During May, the joint costs of processing were \$240,000.  Production and sales value information for the month is as follows:

 Product Units Produced Sales Value at Splitoff Point Turpentine 6,000 liters \$60,000 Paint thinner 6,000 liters 50,000 Spot remover 3,000 liters 25,000

Question: Determine the amount of joint cost allocated to each product if the physical-measure method is used.  (10 points)

Problem 3 – Oregon Lumber processes timber into four products.  During January, the joint costs of processing were \$280,000.  There was no inventory at the beginning of the month.  Production and sales value information for the month is as follows:

 Sales Value at Product Board feet Splitoff Point Ending Inventory 2 x 4’s 6,000,000 \$0.30 per board foot 500,000 bdft. 2 x 6’s 3,000,000 0.40 per board foot 250,000 bdft. 4 x 4’s 2,000,000 0.45 per board foot 100,000 bdft. Slabs 1,000,000 0.10 per board foot 50,000 bdft.

Question: Determine the value of ending inventory if the sales value at splitoff method is used for product costing.  Round to three decimal places when necessary.  (10 points)