Question

The following questions relate to Kyle Company, which manufactures products KA, KB, and KC from a joint process. Joint product costs were $180,000. Additional information follows: If Processed Further Product Units Produced Sales Value at Split-Off Sales Values Additional Costs KA 75,000 $ 430,000 $ 520,000 $ 73,000 KB 79,000 400,000 470,000 61,000 KC 43,000 340,000 430,000 49,000 After the publication of recent scientific test results, the government has banned the sale of product KC. IF KC is produced, it must be disposed of in an approved way that costs $174,200 for every 43,000 units produced. Required: a. Assuming that Kyle Company continues to use the physical quantities method of allocation, what joint costs will be allocated to KA and to KB, respectively

Answer 1

KA = $414,000

KB = $400,660

Step-by-step explanation:

The computation of joint costs will be allocated to KA and to KB is shown below:-

Total units produced of KA Product and KB Product = 75,000 + 79,000

= 154,000

Joint product cost = $180,000 + $174,200

= $354,200

Product Joint costs

KA $414,000 ($354,200 × $180,000 ÷ 154,000)

KB $400,660 ($354,200 × $174,200 ÷ 154,000)

Therefore for KA Joint cost is $414,000 and For KB the Joint cost is $400,660