The Joplin Company Conducts a Simple Chemical Process in Department

question 77

Essay

The Joplin Company conducts a simple chemical process in Department #1, which produces three separate items: A, K, and H. A is processed further in Department #2. K is processed further in Department #3. Product H is a by-product, to be accounted for by the cost reduction method. The following information relates to September:
Department #1's costs $420,000.
Department #2's costs $150,000.
Department #3's costs $60,000.
A: 25,000 pounds completed; 23,500 pounds sold for $12 per pound.
K: 75,000 pounds completed; 70,000 pounds sold for $7.50 per pound.
H: 10,000 pounds completed; 10,000 pounds sold for $1.50 per pound. (There are shipping costs of $0.30 per pound.)
There were no beginning inventories.
Required:
Prepare a schedule to show the computation for the unit costs per pound for Products A, K, and H assuming Joplin uses the estimated net realizable value method to allocate joint costs to the main products.

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Definitions:

Systematic Errors

Errors that are consistently reproducible and can be traced to a flaw in the measurement system, often affecting the accuracy of an experiment or study.

Bias

A tendency or prejudice towards or against something or someone in a way that is considered to be unfair, affecting impartial judgment.

Pilot Testing

An initial small-scale implementation used to test and refine a project, study, or product before full scale execution or launch.

Internal Consistency

Internal consistency is a measure of the reliability of a test or scale; it assesses the extent to which all parts or items of a survey measure the same concept or construct and therefore reflects the interrelatedness of the items within the test.