Cariboo Manufacturing Company Incurred a Joint Cost of $600,000 in the Production

question 117

Multiple Choice

Cariboo Manufacturing Company incurred a joint cost of $600,000 in the production of X and Y in a joint process. Presently, 1,800 of X and 1,400 of Y are being produced each month. Management plans to decrease X's production by 300 units in order to increase the production of Y by 500 units. Additionally, this change will require minor modifications, which will add $20,000 to the joint cost. This cost is entirely attributable to product Y. What is the amount of the joint costs allocable to X and Y before changes to existing production assuming Cariboo allocates their joint costs according to the proportion of X and Y produced?
$\begin{array}{cc}\text{ Product X } & \text{ Product Y } \\\end{array}$
A. $\begin{array}{cc} \$262,500 & \$ 337,500 \\\end{array}$
B. $\begin{array}{cc} \$ 264,706 & \$ 335,294 \\\end{array}$
C. $\begin{array}{cc}\$ 273,529 & \$ 326,471 \\\end{array}$
D. $\begin{array}{cc}\$ 337,500 &\$ 262,500\end{array}$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Target Areas

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Datum Feature

A reference point, axis, or plane from which dimensions are measured, providing a starting point for the geometric control of a part.

Datum Target Point

A specific point, line, or area on a part that serves as a reference or starting point for geometric measurements.

Edge View

A perspective in a drawing that shows the object or part as if being viewed directly from its side, highlighting its outline.