Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a
joint process. The joint costs incurred are $ for a standard production run that
generates pints of Smooth Skin and pints of Silken Skin. Separable
processing costs beyond the splitoff point are $ per pint for Smooth Skin and $
per pint for Silken Skin.
Required: How much of the joint costs are allocated to Smooth Skin and Silken Skin
under each of the following methods:
Physical quantity method
Sales value at splitoff method. Assume the following sales prices at the splitoff point:
Smooth Skin sells for $ per pint, while Silken Skin sells for $ per pint.
Net realizable value method. Assume the following sales prices after further
processing: Smooth Skin sells for $ per pint, while Silken Skin sells for $ per
pint.
For all requirements, do not round intermediate calculations. Round final answers to
nearest whole dollar amounts.
Answer is complete but not entirely correct.
