Question Details

(Solved) (Latest ver. Aug 2020) - Joint Costs

Brief item decscription

Item details:


Here, two or more units of the software are sold as a single package. Managers at Software For You are keenly interested in individual product-profitability figures. Information pertaining to its three bundled products and the stand-alone selling prices of its individual products is as follows:

Selling PriceCostPackagePackaged Price
Word Processing(WP) $125$18WP & SS $220
Spreadsheet (SS) $150$20WP & AS $280
Accounting Software (AS) $225$25All three $380

a. Using the stand-alone revenue-allocation method, allocate the $380 packaged price of "All Three" to the three software products
1. with selling prices as the weights.
2. with individual product costs as the weights.
3. based on physical units.

b. Allocate the $380 packaged price of "All Three" to the three software products using the incremental revenue-allocation method. Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software.

#2 Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20x3, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer were as follows:

ProductCasesSales Value at Splitoff PointSeparable CostsSelling Price
Catsup100,000$6 per case$3.00 per case$28 per case
Juice 150,000$8 per case$5.00 per case$25 per case
Canned200,000$5 per case$2.50 per case$10 per case


Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.


About this question:

This question was answered on: Sep 16, 2020

PRICE: $11.5 (18.37 KB)

Buy this answer for only: $11.5

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now