Vanguard Company Makes Three Products,M,N,and P,which Come from a Joint

question 50

Essay

Vanguard Company makes three products,M,N,and P,which come from a joint process.The joint costs for each batch of the products are: $80,000 for direct materials,$40,000 for direct labor,and $30,000 for indirect costs (overhead).Each batch produces 10,000 pounds of product M with a market value of $6 per pound;5,000 pounds of N with a market value of $12 per pound;and 9,000 pounds of P with a market value of $10 per pound.
Required:
1)Determine the total amount of joint cost allocated to each of the products,assuming that the allocation is based on the weight of products produced.(Do not round your intermediate calculations.Round each of your final answers to the nearest whole dollar. )2)Determine the total amount of joint cost allocated to each of the products,assuming that the allocation is based on the market value of the products.(Do not round your intermediate calculations.Round each of your final answers to the nearest whole dollar. )

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Definitions:

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, including the principal and any remaining interest.

Stated Interest Rate

The annual interest rate declared on a loan or financial instrument, not including any fees or compounding of interest.

Effective Yield

The total yield of a bond, taking into account annual interest payments and the bond’s price fluctuation.

Fair Value Option

An accounting choice that allows companies to report financial assets and liabilities at their fair values, with changes in fair value recognized through profit or loss.