Red Paper Company Processes Wood Pulp into Two Products

question 66

Essay

Red Paper Company processes wood pulp into two products.During March the joint costs of processing were $144,000.Production and sales value information for the month were as follows:

Paper sells for $2.75 a kilogram and cardboard sells for $3.50 a kilogram.
There were no beginning inventories for March but ending inventories totalled 10,000 kilograms for paper and 12,000 kilograms for cardboard.
Required:
Prepare a product line income statement assuming that joint costs are allocated on the constant gross margin percentage method based on total production.Present production costs and separable costs individually.

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Definitions:

Retinal Disparity

The minor variation in what is seen by each eye, due to the differing perspectives from which each eye observes the environment.

Depth Perception

The ability to perceive the world in three dimensions and to judge the distance of objects accurately.

Skin Sensations

Feelings perceived through the skin, including touch, pressure, heat, cold, and pain, mediated by the nervous system.

Pressure

The feeling of stressful urgency caused by the perception of the need to perform well in a situation or accomplish a task.