Quick Systems Inc produces three products T, U, V. Each product can be sold at...
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Quick Systems Inc produces three products T, U, V. Each product can be sold at split off: T ($6 per unit), U ($20per unit) and V ($7.5 per unit). All three products can be further processed to make TT,UU, and VV. A fourth product, H, is a by-product of the production process. Product H can be sold for $2 per unit with additional processing. A is processed at split-off point. At all times by-products are assigned joint cost based on NRV. During April the joint costs of production were $350,000. Production, additional processing costs, and sales value after additional processing information for the month are as follows:
Product
Units
Selling price per unit (after further processing)
Further processing costs
TT
18,000
$21
$42,000
UU
20,000
$24
$90,000
VV
30,000
$18
$66,000
H
10,000
$2
$5,000
Required:
a. Determine the amount of joint cost allocated to each product if allocation is by NRV of final product.
Product
NRV
Allocated
TT
UU
VV
Total
H
b. Which products should be processed further beyond splitoff point.
T
U
V
Answer & Explanation
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