Product X Is Sold for $32 a Unit and Product

question 67

Multiple Choice

Product X is sold for $32 a unit and Product Y is sold for $48 a unit. Each product can also be sold at the splitoff point. Product X can be sold for $10 and Product Y for $8. Joint costs for the two products totaled $2,000 for January for 300 units of X and 250 units of Y. What are the respective joint costs assigned each unit of products X and Y if the sales value at splitoff method is used?

• A)$2.96 and $4.44
• B)$4.00 and $4.55
• C)$4.00 and $3.20
• D)$4.55 and $4.55

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Definitions:

Uncollectible

Refers to debt or receivables that cannot be recovered or are very unlikely to be paid by debtors.

Percent of Sales Method

A financial analysis tool used to forecast future figures by assuming they will be a fixed percentage of sales volume.

Bad Debt Expense

Bad debt expense is an estimate of the uncollectible amounts for credit sales or loans extended, recognized as an expense in the income statement.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.