Exam 7: Cost Allocation: Departments, Joint Products, and By-Products

Hatchett Inc.produces joint products L,M,and N from a joint process.Information concerning a batch produced in May at a joint cost of $75,000 was as follows: The amount of joint costs allocated to product L using the physical measure method is (calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar):

The Insurance Plus Company has two service departments - actuarial and premium rating,and two production departments - marketing and sales.The distribution of each service department's efforts to the other departments is shown below: The direct operating costs of the departments (including both variable and fixed costs)were as follows: Actuarial $50,000.Premium Rating $40,000.Marketing $60,000.Sales $70,000.The total cost accumulated in the sales department using the direct method is (calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar):

The Sakicki Manufacturing Company has two service departments - purchasing and maintenance,and two production departments - fabrication and assembly.The distribution of each service department's efforts to the other departments is shown below: The direct operating costs of the departments (including both variable and fixed costs)were as follows: Purchasing $96,000.Maintenance 18,000.Fabrication 72,000 Assembly 48,000.The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first).Calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar.

The objectives of cost allocation are to:

Marin Products produces three products - DBB-1,DBB-2,and DBB-3 from a joint process.Each product may be sold at the split-off point or processed further.Additional processing requires no special facilities,and production costs of further processing are entirely variable and traceable to the products involved.Key information about Marin's production,sales,and costs follows. The amount of joint costs allocated to product DBB-3 using the physical measure method is (calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar):