Question

The Marshall Company has a joint production process that produces two joint products and a by-product. The joint products are Ying and Yang, and the by-product is Bit. Marshall accounts for the costs of its products using the net realizable value method. The two joint products are processed beyond the split-off point, incurring separable processing costs. There is a $300 disposal cost for the by- product. A summary of a recent month's activity at Marshall is shown below: Units sold Units produced Separable processing costs-variable Separable processing costs-fixed Sales price Ying 15,000 15,000 $42,000 $ 3,000 $ 6.00 Yang 12,000 12,000 $ 14,000 $ 1,000 $ 12.50 Bit 3,000 3,000 $ $ $ 1.50 Total joint costs for Marshall in the recent month are $84,200, of which $36,206 is a variable cost. Required: 1. Calculate the manufacturing cost per unit for each of the three products. (Round manufacturing cost per unit answers to 2 decimal places.) 2. Calculate the total gross margin for each product. Ying Yang Bit Manufacturing cost per unit Total gross margin

Answer 1

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Statement of Monafelcturing Cost per ent. Bit Joint lost: Variable fixed 23997 lY488 179 198 3621 4799 separable Procestoy cost Variable 48000 30.00 14000 fixed Todal Manufacturing Cost 8H00 A No. of Units sold Manifacherry lost per unit 5.81 15000 48 680 12000 4.06 84२० 3000 ®) Statement of a Total Gross Margin Bit Revenue 90,000 50.000 4ooo 87100 8420 Ley Total Manifatsing Cost 300 Las Disposal Cost Q900 101380 Gross Margin (4220) - Working Notes:- (o variable Joint of $36206 has appostioned ratio of their among 3 Products in the Units Prodneed i.e. 15000 10000 3000 ai) fixed Joint Cost of $47994 has apportioned 3 Products in the ratio of their among Produced ie 15000 : 120 00 : 3000