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Joint Cost Allocation—Physical Units Method Blake’s Blacksmith Co. produces two types of shotguns, a 12-gauge and 20-gauge. The shotguns are made through a joint production process that ultimately produces 35 12-gauge shotguns and 15 20-gauge shotguns and costs a total of $3,700 per batch. After the split-off point, each type of shotgun goes through an additional crafting process before it is sold. The additional production process of the 12-gauge shotgun costs $35 per gun, after which it is sold for $170 per gun. The additional production process of the 20-gauge shotgun costs $22 per gun, after which it is sold for $142 per gun. Determine the amount of joint production costs allocated to each type of shotgun using the physical units method. Joint Product Allocation 12-gauge shotgun $ 20-gauge shotgun Totals $

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Answer:

Joint cost allocation

Physical units Joint cost allocated

12-gauge 35 $2,590

($3,700*35/50)

20-gauge 15 $1,110

($3,700*15/50)

Total 50 $3,700

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