Question

Blum Company produces three products: A, B, and C from the same process. Joint costs for this production run are $2,100. Pounds Sales price per lb. at split-off Disposal cost per lb. at split-off Further processing per pound Final sales price per pound A 800 $6.50 $3.00 $2.00 $7.50 B 1,100 8.25 4.20 3.00 10.00 C 1,500 8.00 4.00 3.50 10.50 If the products are processed further, Blum Company will incur the following disposal costs upon sale: A, $3.00; B, $2.00; and C, $1.00. Refer to Blum Company. Using a physical measurement method, what amount of joint processing cost is allocated to Product A (round to the nearest dollar)

Answer 1

$416

Step-by-step explanation:

Calculation to determine the amount of joint processing cost that is allocated to Product A

First step is to determine the split-off Total

Yards Sales price

at split-off Total

A 800 *$6.50= $5,200

B 1,100* $8.25= $9,075

C 1,500*$8.00=$12,000

Total $26,275

Now let determine the amount of joint processing cost that is allocated to Product A

Product A joint processing cost=($5,200/$26,275) * $2,100

Product A joint processing cost=$416

Therefore Using a physical measurement method, what amount of joint processing cost is allocated to Product A is $416