Bryant Corporation Uses a Joint Process to Produce Products A

question 69

Essay

Bryant Corporation uses a joint process to produce products A, B, and C. Each product may be sold at split- off or processed further and then sold. Joint processing costs for the year amounted to $100,000. Other information is presented below: $\begin{array}{llll}&&\text { Separable }\\&&\text { Processing }\\\text { Product } & \begin{array}{l}\text { Sales Value at } \\\text { Split-off }\end{array} & \begin{array}{l}\text { Costs after } \\\text { Split-off }\end{array} & \begin{array}{l}\text { Sales Value at } \\\text { Completion }\end{array}\\\text { A } & \$ 94,000 & \$ 28,000 & \$ 116,000 \\\text { B } & 60,000 & \$, 000 & \$ 2,000 \\\text { C } & 66,000 & 14,000 & \$ 0,000\end{array}$ Required:
a. Which products, if any, should be processed further?
b. If all three products were processed further, what would be the effect on profits?

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Definitions:

Materials Price Variance

The difference between the actual cost of raw materials and the expected (or standard) cost, which can indicate purchasing efficiency.

Variable Manufacturing Overhead Standards

Benchmark metrics or rates used to allocate variable overhead costs based on actual production volumes.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost rates.

Direct Labor-hours

The aggregate of hours expended by staff members actively participating in the manufacturing process, utilized to assign labor charges to various products.