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Two finished products, A and B, are sold for S16 a unit and $24 a unit, respectively
Two finished products, A and B, are sold for S16 a unit and $24 a unit, respectively. Each product can also be sold at the splitoff point. Product A can be sold for S10 and Product B, for 58. Joint costs for the two products totalled 58,000 for January for 600 units of A and 500 units of B.
What are the respective joint costs assigned to each unit of Products A and B if the sales value at splitoff method is used? a. $8.00 and $9.10 b. $5.92 and $8.88 c. $6.40 and $14.40 d. $6.40 and $9.10 e. S8.00 and 56.40
Expert Solution
Computation of respective joint costs assigned to each unit of products A and B if the sales value at split off method is used:
Product A sale value at split-off = 600 units * $10 = $6,000
Product B sale value at split-off = 500 units * $8 = $4,000
Joint costs allocated to product A = $8,000 * $6,000 / $10,000 = $4,800
Joint cost per unit = $4,800 / 600 units = $8
Joint costs allocated to product B = $8,000 * $4,000 / $10,000 = $3,200
Joint cost per unit = $3,200 / 500 units = $6.4
So, the correct option is E.
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