Garrison Co

question 15

Multiple Choice

Garrison Co. produces three products — X, Y, and Z — from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond split-off. Joint production costs for the year were $120,000. Sales values and costs needed to evaluate Garrison's production policy follow. The amount of joint costs allocated to product X using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

• A) $12,000.
• B) $32,000.
• C) $36,000.
• D) $48,000.
• E) $72,000.

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Definitions:

Supplying Commitment

An agreement or pledge by a supplier to provide a specified quantity of product to a purchaser at a predetermined time and price.

Financial Advantage

The benefit gained in financial terms from an action or investment, often measured in terms of profits, savings, or enhanced value.

Making Part

The process involved in the creation or manufacturing of components that will be used in the assembly of a final product.

Purchasing Part

A component required in the production process or maintenance of equipment, acquired through the procurement process.