Netzone Company is in semiconductor industry and fabrication of silicon-wafer ch
ID: 2458364 • Letter: N
Question
Netzone Company is in semiconductor industry and fabrication of silicon-wafer chips splits off two types of memory chips, Standard and Premium. The following information was collected for last quarter of the calendar year:
Direct materials processed: 200 kgs (Both standard and premium chips weigh 10 grams each)
Production: Standard 10,000 chips
Premium 6,500 chips
Sales: Standard 9,500 at $100 per chip
Premium 6,000 at $170 per chip
The cost of purchasing 200 kgs of direct materials and processing it up to the splitoff point to yield a total of 16,500 chips of good products was $1,950,000.
Beginning inventories totalled 100 chips for Standard and 50 chips for Premium. Ending inventory amounts reflected 100 chips of Standard and 50 chips of Premium. October costs per unit were the same as November.
7) What are the physical-volume proportions for products Standard and Premium, respectively?
A) 60.00% and 40.00%
B) 55.00% and 45.00%
C) 60.61% and 39.39%
D) 54.00% and 46.00%
8) When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated Standard chips?
A) $1,170,000
B) $1,818,818
C) $975,000
D) $1,181,818
9) When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated Premium chips?
A) $768,182
B) $1,170,000
C) $975,000
D) $780,000
Explanation / Answer
correct option is "C" - 60.61% and 39.39%
[total production = 10000 +6500 = 16500
Standard = 10000 /16500 = 60.61%
Premium = 6500 /16500 = 39.39%
8)Allocation to standard = 1,950,000 * 60.61% = 1181895
corrct option is "D" - 1181818 (approx to 1181895 ,differece is 77 due to decimal rounding off in %)
9) Allocation to premium = 1950000 *39.39% = 768105
correct option is "A" - 768182