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JamesStone
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Category: General
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Experience:  BA English Teaching, Data Analyst 7 Years
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S&J produces two products through a single manufacturing process.

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S&J produces two products through a single manufacturing process. Each batch of product results in 400 pounds of product S and 600 pounds of product J. The process requires materials, labor, and manufacturing overhead costing $50,000 per batch. S sells for $30 per pound, while J sells for $20 per pound.


16. Using the physical units method of allocating joint production costs would result in an allocation to product S of: _____.

17. Using the relative sales value approach of allocating joint production costs would result in an allocation to product S of _____.
Submitted: 6 years ago.
Category: General
Expert:  JamesStone replied 6 years ago.
16. The physical units method attempts to distribute production costs based on a unit of measure, in this case, pounds. Given the ratio of product S being 400 out of 1000 total pounds of product produced per batch, the allocation of production costs would be $20,000, as this is equivalent to 40% of the total.
17. The relative sales value approach of allocating joint production costs uses the alternative perspective of sales value. In this case, the total value produced per batch is (400 x $30) for product S, or, $12000, and (600 x $20) for product J, which is also $12000. This even ratio makes the allocation of product S based on the relative sales value approach $25,000, equivalent to 50% of the total sales value.
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