Marin Products Produces Three Products — DBB-1, DBB-2, and DBB-3

question 45

Multiple Choice

Marin Products produces three products — DBB-1, DBB-2, and DBB-3 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. Key information about Marin's production, sales, and costs follows.The amount of joint costs allocated to product DBB-3 using the physical measure method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar) :

• A) $54,250.
• B) $757,800.
• C) $1,705,320.
• D) $49,200.
• E) $1,136,880.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate and compare the profitability of investments, which calculates the difference between the present value of cash inflows and outflows.

Concentration Accounts

A single account used by companies to aggregate funds from different accounts, simplifying cash management.

Lockboxes

A banking service where payments are sent to a special post office box rather than to the company's offices, to speed up transaction processing.

Disbursement Float

The time lag between when a payment is made by writing a check and when the funds are actually removed from the payer's account.