Palen Chemical Company Manufactures X-111, X-112, and X-113 from a Joint

question 25

Essay

Palen Chemical Company manufactures X-111, X-112, and X-113 from a joint process. The following information is available for the period just ended:


Required:
A. Does Palen allocate joint costs by using the physical-units method? Explain.
B. Assume that Palen does not use the physical-units method but instead allocates joint costs by using the relative-sales-value method. Find the four unknowns in the preceding table.

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Definitions:

Profits

The financial surplus remaining after all expenses, including taxes and operating costs, have been deducted from total revenue.

Management Responsibilities

The duties and obligations that managers have to oversee and guide their organization effectively.

Personal Liability

The legal responsibility of an individual to satisfy debts or obligations from their personal assets.

Joint Stock Company

A partnership agreement in which company members hold transferable shares, whereas all the goods of the company are held in the names of the partners.