Quatro Corporation Manufactures Two Chemicals (Flextra and Hydro) in a Joint

question 28

Essay

Quatro Corporation manufactures two chemicals (Flextra and Hydro) in a joint process. Data from a recent month follow.
Direct materials used: $360,000
Direct labor: $150,000
Manufacturing overhead: $690,000
Manufacturing output:
Flextra: 40,000 gallons
Hydro: 120,000 gallons
Flextra sells for $15 per gallon and Hydro sells for $20 per gallon.

Required:
A. Compute the total joint costs to be allocated to Flextra and Hydro.
B. Compute the joint costs that would be allocated to Flextra by using the physical-units method.
C. Compute the joint costs that would be allocated to Hydro by using the relative-sales-value method.
D. Assume that Hydro can be converted into a more refined product, Hydro-R, in a totally separable process at an additional cost of $4 per gallon. If the refined product can be sold in the marketplace for $26 per gallon, compute the net realizable value of Hydro-R.

---

Definitions:

Luck

The force that seems to operate for good or ill in a person's life, as in shaping circumstances, events, or opportunities.

Fixed Ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses, leading to a high and steady response rate.

Variable Ratio

refers to a schedule of reinforcement where a response is reinforced after an unpredictable number of responses, making it a powerful maintainers of behavior in operant conditioning.

Fixed Interval

A schedule of reinforcement where a response is rewarded only after a specified amount of time has elapsed.