ABC Company produces three products in a joint production process. At the split-
ID: 2581315 • Letter: A
Question
ABC Company produces three products in a joint production process. At the
split-off point, all three products are produced further and then sold.
Information about these products for 2018, the most recent year, appears
below:
Product A Product B Product C Units produced ............... 12,000 18,000 20,000
Selling price ................ $51 per unit $20 per unit $40 per unit
Additional processing costs .. $26 per unit $10 per unit $14 per unit
Joint costs for 2018 totaled $291,200.
During 2018, ABC Company sold 9,500 units of Product A; all 18,000 units
of Product B were sold; and all 20,000 units of Product C were sold.
Assume there were no beginning inventories of any type in 2018.
ABC Company employs the physical units method to allocate joint costs to
products.
Calculate the amount of joint costs allocated to Product A. Do not use
decimals in your answer.
Explanation / Answer
Amount of joint costs allocated to Product A = 291200/(12000+18000+20000)*12000= 69888