Question

Cariboo Manufacturing Company incurred a joint cost of $1,147,000 in the production of X and Y in a joint process. Presently, 3,300 of X and 2,900 of Y are being produced each month. Management plans to decrease X's production by 1,050 units in order to increase the production of Y by 1,400 units. Additionally, this change will require minor modifications, which will add $79,360 to the joint cost. This cost is entirely attributable to product Y. What is the amount of the joint costs allocable to X and Y before changes to existing production, assuming Cariboo allocates their joint costs according to the proportion of Y and X produced

Answer 1

Answer: See explanation

Step-by-step explanation:

The cost allocation rate will be:

= 1147000 / (3300 + 2900)

= 1147000 / 6200

= 185

Cost allocated to X = 185 × 3300 = 610500

Cost allocated to Y = 185 × 2900 = 536500