The amount of joint cost of each production run allocated to Ultrasene on a physical-units basis is $386,186.
The amount of joint cost of each production run allocated to Compod on a net-realizable-value basis is $618,471.
How to solve for the amounts
generated unit
= 138000 + 98000
= 236000
The joint basis would be
930000 * 98000 / 236000
= $386,186.
b. Net realizable
= 138000 * (15 - 2.10)
= 1780200
value of units generated
= 98000 * (14.25 - 5.10)
= 896700
Total realized = 1780200 + 896700
= 2,676,900
amount of joint =
930000 * 1780200 / 2,676,900
= $618,471.
complete question
Lafayette Company manufactures two products out of a joint process: Compod and Ultrasene. The joint costs incurred are $930,000 for a standard production run that generates 138,000 gallons of Compod and 98,000 gallons of Ultrasene. Compod sells for $15.00 per gallon while Ultrasene sells for $14.25 per gallon.
Problem 17-32 Part 3
3. Suppose the following additional processing costs are required beyond the split-off point in order to obtain Compod and Ultrasene: $2.10 per gallon for Compod and $5.10 per gallon for Ultrasene.
a. Calculate the amount of joint cost of each production run allocated to Ultrasene on a physical-units basis.
b. Calculate the amount of joint cost of each production run allocated to Compod on a net-realizable-value basis. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)