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Harmon Inc produces joint products L, M, and N from a joint process
Harmon Inc produces joint products L, M, and N from a joint process. Information concerning a batch produced in May at a joint cost of $110,000 was as follows: button Snipping Tools Separable Processing cost Units Produced Sales Value (after addt'i processing) L M N Total $13,500 $32,000 $12,500 $ 58,000 2,600 6,000 5,700 14,300 $74,000 $67,500 $28,000 $169,500 In a future update, S new home. Try impro with Snip & Sketch Windows logo key + Try Snip & Sketch The amount of joint costs allocated to product N using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
Multiple Choice $20,000. $46,154. O $42,184. $35,859. O $43,846.
Expert Solution
In physical measure method the joint costs are allocated to products based on physical quantity such as units, weight and volume etc.
Given,
Units produced of product N is 5700
Joint cost is $1,10,000
Joint cost allocated to Product N is
=No of units of Product N/Total no of units × Joint cost
= 5700/14300 × 110000
= 0.398601399 × 110000
=43846.1539
Rounded off to $43, 846
Therefore option -e is correct
Note : processing cost is used by weighted average method and sales values by relative sales method for allocation of joint cost.
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