Simpson Manufacturing Enterprises Uses a Joint Production Process That Produces

question 26

Essay

Simpson Manufacturing Enterprises uses a joint production process that produces three products at the split-off point. Joint production costs during April were $720,000. The company uses the net realizable value method for allocating joint costs. Product information for April was as follows:

Required:
a. Assume that all three products are main products and that they can be sold at the split-off point or processed further, whichever is economically beneficial to Simpson. Allocate the joint costs to the three products.
b. Assume that Simpson uses the physical quantities method to allocate the joint costs. How much would be allocated to each of the three products?

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Definitions:

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