Florek Inc Required:
A

question 25

Essay

Florek Inc. allocates joint costs by using the net-realizable-value method. In the company's Chicago plant, products 1 and 2 emerge from a joint process that costs $310,000. Product 2 is then processed at a cost of $320,000 into products 3 and 4. Data pertaining to 1, 3, and 4 follow.
$\begin{array} { l l l l } & \underline { 1 } & \underline { 3 } & \underline { 4 } \\\text { Costs beyond split-off } & \$ 30,000 & \$ 12,000 & \$ 18,000 \\\text { Selling price } & 30 & 34 & 60 \\\text { Pounds produced } & 10,000 & 2,000 & 3,000\end{array}$ Required:
A. Allocate the $320,000 processing cost between products 3 and 4. Round to the nearest whole dollar.
B. From a profitability perspective, should product 2 be processed into products 3 and 4? Show your calculations.
C. Assume that the net realizable value associated with 2 is zero. How would you allocate the joint cost of $25310,000?

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Definitions:

Job Depth

The degree to which a job requires a variety of skills, gives workers autonomy, and impacts the organization or its clients.

Automation

The use of technology to perform tasks without human intervention, often improving efficiency, reliability, and speed in processes.

Sociotechnical Systems

A conceptual approach emphasizing the interrelatedness of social and technical aspects of an organization to optimize performance and employee satisfaction.

Techno-human Systems

Integrated systems that include both technological components and human elements, focusing on their interaction to enhance overall performance.