Calamata Corporation Processes a Single Material into Three Separate Products

question 70

Essay

Calamata Corporation processes a single material into three separate products A,B,and C.During September,the joint costs of processing were $300,000.Production and sales value information for the month were as follows:
$$\begin{array} { | c | c | c | c | } \hline \text { Product } & \text { Units Produced } & \begin{array} { c } \text { Final Sales } \\\text { Value per Unit }\end{array} & \begin{array} { c } \text { Separable } \\\text { Costs }\end{array} \\\hline \text { A } & 10,000 & \$ 25 & \$ 125,000 \\\hline \text { B } & 15,000 & 30 & 250,000 \\\hline \text { C } & 12,500 & 24 & 125,000 \\\hline\end{array}$$ Required:
Determine the amount of joint cost allocated to each product if the constant gross-margin percentage NRV method is used.

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Definitions:

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Pricing Strategy

A method or model used by businesses to set the selling price for their products or services, taking into account factors like cost, competition, target market, and overall business objectives.

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Prestige Product

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