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 wa

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)

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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)

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