Question

The Silver Center (TSC) produces cups and platters. TSC purchases silver and other metals that are processed into silver alloy that is used to make platters and cups. TSC incurred $52,000 of materials cost and $56,000 of labor cost to produce the silver alloy. Platters are made first and the residual alloy is remixed into a lower grade silver plated material that is used to make the cups. Remixing cost amount to $5,000. The recent batch contained 10,000 platters and 4,000 cups. TSC sold the platters for $160,000 and the cups for $24,000. If number of units is used to allocate the joint cost, what is the income earned for platters?

Answer 1

To calculate the income earned for platters, we need to allocate the joint costs based on the number of units produced. The joint cost per unit is $8.07. The income earned for platters is $80,700.

Step-by-step explanation:

To calculate the income earned for platters, we need to allocate the joint costs to the platters and cups based on the number of units produced. The total joint cost is the sum of the materials cost, labor cost, and remixing cost, which is $52,000 + $56,000 + $5,000 = $113,000. Now, we can calculate the joint cost per unit by dividing the total joint cost by the total number of units produced (10,000 platters + 4,000 cups = 14,000 units): $113,000 / 14,000 = $8.07 per unit.

To find the income earned for platters, we multiply the joint cost per unit by the number of platters produced: $8.07 per unit * 10,000 platters = $80,700.