Collie Company Manufactures Three Products from a Joint Process Assuming the Relative- Sales- Value Method of Allocating Joint Costs

question 63

Multiple Choice

Collie Company manufactures three products from a joint process. Joint costs for the year amounted to $250,000. The following data are also available: $\begin{array}{lll}&&\text { Sales } V \text { alue at }\\\text { Product } & \text { Units Produced } & \text { Split- off } \\X & 5,000 & \$ 70,000 \\Y & 3,000 & \$ 30,000 \\Z & 2,000 & \$ 100,000\end{array}$ Assuming the relative- sales- value method of allocating joint costs, the amount of joint costs allocated to product Z would be:

• A) $50,000
• B) $100,000
• C) $250,000
• D) $125,000

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Definitions:

Processes

A series of actions or steps taken in order to achieve a particular end, often referring to sequences in manufacturing or computation.

Solver

A computational tool used in spreadsheet programs to find optimal solutions to complex decision-making problems by changing multiple variables.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Cutting Pattern

A specific layout or arrangement that determines how parts or pieces are to be cut out from materials to minimize waste or maximize efficiency.