Question

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

Direct materials $64,500
Direct labor 35,000
Overhead 26,500

At the split-off point, a batch yields 1,000 barlon, 2,200 selene, 2,100 plicene, and 4,000 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $24 per unit, plicene sells for $26 per unit, and corsol sells for $38 per unit.

Required:
Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

Answer 1

Total Joint Cost

Material = $ 64,500

Labor = $ 35,000

Overhead = $ 26,500

Total joint cost = $ 126,000

Products Units SP at Split Sales % Sales Joint cost Allocated Joint Cost

Barlon 1000 17 17,000 7.88% 126,000 10001.99

Selene 2200 24 52800 23.03% 126,000 29249.5

Plicene 2100 26 54600 25.02% 126,000 31771.01

Corsol 4000 38 152000 44.08% 126,000 55977.5

302200 100.00% 126000 127000