Barry Chemical Company Manufactures X-111, X-112, and X-113 from a Joint

question 73

Essay

Barry Chemical Company manufactures X-111, X-112, and X-113 from a joint process. The following information is available for the period just ended: $\begin{array}{lcccr}&\underline{X-111} &\underline{X-112} &\underline{X-113} & \underline{\text { Total }}\\\text { Units produced } & 6,000 & 14,000 & 30,000 & 50,000 \\\text { Joint cost allocation } & ? & \$ 18,400 & ? & \$ 80,000 \\\text { Sales value at split-off } & \$ 104,000 & ? & ? & \$ 260,000\end{array}$
Required:
A. Does Barry allocate joint costs by using the physical-units method? Explain.
B. Assume that Barry does not use the physical-units method but instead allocates joint costs by using the relative-sales-value method. Find the four unknowns in the preceding table.

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Definitions:

Margin

The difference between the selling price of a product or service and its cost, usually expressed as a percentage of the selling price.

Combined Return On Investment

A measure that evaluates the efficiency of an investment or compares the efficiency of several different investments.

Operating Data

Information related to the operations of a business, including production volumes, sales, and expenses, used for decision-making and performance evaluation.

Margin

The difference between the selling price of a product and the cost of goods sold, expressed as a percentage of the selling price.