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1. Simpli Chili Company produces mild, original, and extra spicy chili in a joint process. The total joint cost is $1,850,000. Using the net realizable value method, how much of the joint costs will be allocated to each type of chili? 2. Simpli Chili Company produces mild, original, and extra spicy chili in a joint process. The total joint cost is $1,850,000. Each type is packaged in different can sizes. How is the joint cost allocated between the three types? 3. Pineapple Co processes 10,000 pineapples. This results in 2,500kg of juice and 7,500kg of slices. The joint

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98 views3 pages

Additional Questions

1. Simpli Chili Company produces mild, original, and extra spicy chili in a joint process. The total joint cost is $1,850,000. Using the net realizable value method, how much of the joint costs will be allocated to each type of chili? 2. Simpli Chili Company produces mild, original, and extra spicy chili in a joint process. The total joint cost is $1,850,000. Each type is packaged in different can sizes. How is the joint cost allocated between the three types? 3. Pineapple Co processes 10,000 pineapples. This results in 2,500kg of juice and 7,500kg of slices. The joint

Uploaded by

karthikdora_007
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1.

Joint Product
Simpli Chili Company produces three flavor of its chili in a joint process: mild, original and extra
spicy 500,000 gallons of unspiced chili are produced per batch, and then varying amount and types
if spices are added to produce the mild, original and extra spicy flavors. The three types of chili are
packaged in 16-ounce cans. The total joint cost of unspiced chili is $1,850,000.
One batch result in 500,000 gallons of unspiced chili. The unspiced chili is, of course, not marketable
at that point, it needs spices.
After the spices have been added, Simpli has 800,000 cans of mild chili, 2,000,000 cans of original
chili, and 1,200,000 cans of extra spicy chili. The cost per can of adding the spices and blending
them into the unspiced chili are as follows:
Mild .065
Original .075
Extra Spicy .080

The mild chili sells for $0.98 per can. The original chili sells for $1.05 per can. The extra spicy chili
sells for $1.09 per can.
Using the Net Realizable Value Method of allocating the joint costs, how much of the joint costs
will be allocated to each type of chili?

2. Joint Cost
Simpli Chili Company produces three flavor of its chili in a joint process: mild, original and extra
spicy 500,000 gallons of unspiced chili are produced per batch, and then varying amount and types
if spices are added to produce the mild, original and extra spicy flavors.
However, in this example we will say that each of the three types of chili is packaged in a choice of
can sizes: 12-Ounce, 16-Ounce and 20-Ounce cans. 100,000 gallons are used to produce the mild
chili, 250,000 gallons are used for the original chill, and 150,000 gallons are used for the extra spicy
chili. The total joint cost of the unspiced chili (including direct materials, direct labor and overhead)
is $1,850,000. The joint cost is allocated?

3. Joint Cost
Pineapple Co. produces pineapple juice and canned slices at its Pineapple Processing Plant in
Hawaii. The information about the process and the two joint products is as follows:
• 10,000 pineapples are processed.
• The process result in 2,500 kg of juice and 7,500 kg of slices.
• The juice can be sold for $10 per kg and the slices can be sold for $15 per kg.
• The joint cost of production are $120,000.
• The juice can be processed further into a premium juice. This will cost an additional $8,000,
but the sales price per kg will be $15.
• The slice can be further processed into chunks. This will cost $4,000 and the chunks can be
sold for $2 per kg more than the slice.

4. Process Costing
Following information is available regarding process A for the month of June 2020:
Production Record:
Units in Process as on 01.06.2020 4,000
(All material are used, 25% complete for labor and overheads)
New Units Introduced 16,000
Units Completed 14,000
Units in process as on 30.06.2020 6,000
(All material used, 33.33% complete for labor and overhead)
Cost Record:
Work in Process as on 1.06.2020 $
Material 6,000
Labor 1,000
Overhead 1,000
8,000
Cost During the moth
Material 25,600
Labor 15,000
Overhead 15,000
55,600

Prepare Using FIFO and WAM Method

(i) Statement of Equivalent Production


(ii) Statement of Showing Cost for Each Element
(iii) Statement of Apportionment of Cost
5. Activity Based Costing
Linex Limited manufacturing three product P,Q and R which are similar in nature and are usually
produced in production runs of 100 units. Product P and R require both machine hours and
assembly hours, whereas product Q requires only machine hours. The Overhead incurred by the
company during the first quarter are as under.
$
Machine Department Expenses 18,48,000
Assembly Department Expenses 6,72,000
Set Up Cost 90,000
Stores Receiving Cost 120,000
Order Processing and Dispatch 180,000
Inspect and Quality Control Cost 36,000

The date related to the three products the period are as under:
P Q R
Unit Produced 15,000 12,000 18,000
Machine Hours Worked 30,000 Hours 48,000 Hours 54,000 Hours
Assembly hours worked (direct labor 15,000 Hours - 27,000 Hours
hours)
Customers Orders executed (in numbers) 1,250 1,000 1,500
Number of requisitions raised on the 40 30 50
stores

Required: Prepare a statement showing details of overhead costs allocated to each product type
using activity-based costing.

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