Townson Company Manufactures G and H in a Joint Process

question 32

Essay

Townson Company manufactures G and H in a joint process. The joint costs amount to $80,000 per batch of finished goods. Each batch yields 20,000 liters, of which 40% are G and 60% are H. The selling price of G is $8.75 per liter, and the selling price of H is $15.00 per liter.
Required:
A. If the joint costs are allocated on the basis of the products' sales value at the split-off point, what amount of joint cost will be charged to each product?
B. Townson has discovered a new process by which G can be refined into Product GG, which has a sales price of $12 per liter. This additional processing would increase costs by $2.10 per liter. Assuming there are no other changes in costs, should the company use the new process? Show calculations.

---

Definitions:

Diffused Point Pattern

A spatial distribution where objects or phenomena are spread out over a large area without a discernible pattern.

Evaluative "You" Language

Phrases or statements that assess or judge the actions or characteristics of another person, often leading to defensiveness.

Manipulative

Involving the skillful handling or controlling of things or people, often in a cunning or deceptive manner.

Rigid

Characterized by inflexibility or strictness in structure, behavior, or thinking, often resistant to change.