Deli Products Produces Two Products, X and Y, in a Single

question 141

Multiple Choice

Deli Products produces two products, X and Y, in a single process. In 2011, the joint costs of this process were $25,000. In addition, 4,000 units of X and 6,000 units of Y were produced and sold. Separable processing costs beyond the split-off point were: X - $10,000; Y - $20,000. X sells for $10.00 per unit; Y sells for $7.50 per unit.
What is the gross profit of product Y assuming the physical units method is used?
SUPPORTING CALCULATIONS: Joint cost allocation (6,000/10,000 × $25,000) = $15,000 Gross profit [(6,000 × $7.50) - $20,000 - $15,000] = $10,000

• A) $25,000
• B) $-0-
• C) $10,000
• D) $15,000

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