Pak Company produces furniture and uses a joint process to manufacture two grades of wood:...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Pak Company produces furniture and uses a joint process to manufacture two grades of wood: X and Z. During October, the company incurred $48,600,000 of joint production cost. Company produced 81,000,000 board feet of Grade X and 27,000,000 board feet of Grade Z lumber. The company can sell Grade X lumber at the split-off point for $0.70 per board foot and Grade Z lumber at the split-off point for $0.50 per board foot. Alternatively, Grade X lumber can be further processed at a cost of $0.75 per board foot and then sold for $1.50 per board foo and Grade Z can be processed at a cost of $0.55 and can be further sold for $ 1.10 a. How much joint cost should be allocated to Grade X and to Grade Z lumber using the physical units method, sale price method and approximate realized method? b. If Grade A lumber is processed further and then sold, what is the incremental effect on Pak company? Should the additional processing be performed?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
