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 $61,500
Direct labor 40,000
Overhead 25,500
At the split-off point, a batch yields 1,400 barlon, 2,900 selene, 2,800 plicene, and 3,700 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 $27 per unit, and corsol sells for $36 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

Alomar Company

Allocation of Joint Costs:

Barlon = $10,002

Selene = $29,250

Plicene = $31,771

Corsol = $55,977

Step-by-step explanation:

a) Data and Calculations:

Joint costs:

Direct materials $61,500

Direct labor 40,000

Overhead 25,500

Total joint costs $127,000

Joint Products Barlon Selene Plicene Corsol Total

Batch output units 1,400 2,900 2,800 3,700 10,800

Selling price per unit $17 $24 $27 $36

Sales value $23,800 $69,600 $75,600 $133,200 $302,200

Allocation of Joint Costs:

Barlon = $10,002 ($23,800/$302,200 * $127,000)

Selene = $29,250 ($69,600/$302,200 * $127,000)

Plicene = $31,771 ($75,600/$302,200 * $127,000)

Corsol = $55,977 ($133,200/$302,200 * $127,000)