Lond Company Produces Joint Products Jana and Reta, and By-Product

question 12

Essay

Lond Company produces joint products Jana and Reta, and by-product Bynd. Jana is sold at split-off; Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 2013 were as follows: Lond had no beginning or ending inventories and no materials were spoiled in production. Bynd's net realizable value is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product.
Required:
Prepare the following information for Lond Company for the year ended December 31, 2013:
1. Total gross margin.
2. Allocation of joint costs to Jana and Reta.
3. Separate gross margins for Jana and Reta.

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Definitions:

Debt Retirement

The process of paying off an outstanding debt over a period, typically through a series of regular payments.

Operating Activity

The day-to-day actions that are involved in running a business and generating income, such as sales, provision of services, and production.

Interest Paid

The total amount paid by a borrower to lenders as a charge for borrowing money, typically expressed as an annual percentage of the loan principal.

Cash Flows

Cash flows refer to the total amount of money being transferred into and out of a business, especially as affecting liquidity.