(Processing beyond split off and cost allocations) All A Buzz makes three products from a joint production process using honey. Joint cost for the process in 2010 is $123,200.
|
|
Per Unit |
Incremental |
|
|
|
Units of |
Selling Price |
Processing |
Final Sales |
|
|
Product |
Output |
at Split Off |
Cost |
Price |
|
Honey butter |
10,000 |
4.00 |
$3.00 |
$ 6.00 |
|
Honey jam |
20,000 |
6.40 |
4.00 |
14.00 |
|
Honey syrup |
1,000 |
3.00 |
0.40 |
3.60 |
Each container of honey butter, jam, and syrup, respectively, contains 16 ounces, 8 ounces, and 3 ounces of product.
a. Determine which products should be processed beyond the split off point.
b. Assume honey syrup should be treated as a by product. Allocate the joint cost based on units produced, weight, and sales value at split off. Use the net realizable value method in accounting for the by product. (Round to nearest whole percentage.)