Question

Calcion Industries produces two joint products, Y and Z. Prior to the split-off point, the company incurred costs of $36,000. Product Y weighs 25 pounds and product Z weighs 75 pounds. Product Y sells for $150 per pound and product Z sells for $125 per pound. Based on a physical measure of output, allocate joint costs to products Y and Z. Solution Product Y pounds: Product Z pounds: Total pounds: Product Y allocation: Product Z allocation:​

Answer 1

The joint costs can be allocated to products Y and Z based on their relative weights. Using the weight-to-total weight ratio, the allocation can be calculated. Product Y is allocated $9,000 and product Z is allocated $27,000.

Step-by-step explanation:

The allocation of joint costs to products Y and Z can be determined based on their relative weights. Since product Y weighs 25 pounds and product Z weighs 75 pounds, the total weight is 100 pounds. To allocate the costs, we can use the formula:

Product Y allocation = (Product Y weight / Total weight) * Total costs

Product Z allocation = (Product Z weight / Total weight) * Total costs

Substituting the given values, we have:

Product Y allocation = (25 / 100) * $36,000 = $9,000

Product Z allocation = (75 / 100) * $36,000 = $27,000