Question

Sales-Value-at-Split-off Method

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

Direct materials	$69,000
Direct labor	35,000
Overhead	26,000

At the split-off point, a batch yields 1,000 barlon, 2,600 selene, 2,500 plicene, and 3,600 corsol. All products are sold at the split-off point: barlon sells for $17 per unit, selene sells for $23 per unit, plicene sells for $27 per unit, and corsol sells for $37 per unit.

Required:

Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

	Allocated Joint Cost
Barlon	$
Selene
Plicene
Corsol
Total	$

(Note: The total of the allocated cost may not equal actual total costs to due to rounding.)

Answer 1

Allocation of Joint cost

	Sales value at split off		Allocated Joint cost
Barlon	1000*17 = 17000	0.0613	7969
Selene	2600*23 = 59800	0.2155	28015
Plicene	2500*27 = 67500	0.2432	31616
Corsol	3600*37 = 133200	0.48	62400
Total	277500		130000