Ellis Company Ellis Company Produces Two Products from a Joint

question 18

Multiple Choice

Ellis Company Ellis Company produces two products from a joint process: X and Z. Joint processing costs for this production cycle are $8,000.
If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Ellis Company. Using a physical measure, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar) ?

• A) $4,000
• B) $3,243
• C) $5,500
• D) $4,757

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and its expected cost, based on standard rates and hours.

Standard Hours Allowed

The predetermined amount of time expected to be required to complete a unit of work, used as a benchmark in costing and efficiency analysis.

Excel Spreadsheet

A digital worksheet or grid in Microsoft Excel, where users can organize data, perform calculations, and analyze information.

Clearing Account

An account used to temporarily hold transactions in progress or to reconcile discrepancies before the amounts are posted to the correct accounts.