Spaniel Company manufactures three products from a joint process. Joint costs for the year amounted to $250,000. The following data are also available: $$\begin{array}{l}\begin{array} { l l l }
&&\text { Sales Value at }\
\text { Product } & \text { Units Produced } & \text { Split- off } \
\text { X } & 5,000 & \$ 70,000 \
\text { Y } & 3,000 & \$ 30,000 \
\text { Z } & 2,000 & \$ 100,000
\end{array}
\end{array}$$ Assuming the relative- sales- value method of allocating joint costs, the amount of joint costs allocated to product X would be:
A) $87,500
B) $125,000
C) $70,000
D) $250,000

Question

Spaniel Company manufactures three products from a joint process. Joint costs for the year amounted to $250,000. The following data are also available: $$\begin{array}{l}\begin{array} { l l l } 
&&\text { Sales Value at }\
\text { Product } & \text { Units Produced } & \text { Split- off } \
\text { X } & 5,000 & \$ 70,000 \
\text { Y } & 3,000 & \$ 30,000 \
\text { Z } & 2,000 & \$ 100,000
\end{array}
\end{array}$$ Assuming the relative- sales- value method of allocating joint costs, the amount of joint costs allocated to product X would be:
A) $87,500
B) $125,000
C) $70,000
D) $250,000

Quizplus · Accepted Answer

The relative-sales-value method allocates joint costs based on the relative sales value of each product. The sales value of each product is:Product X: $70,000Product Y: $30,000Product Z: $100,000The total sales value of all products is $200,000. The percentage of total sales value for each product is:Product X: 70,000 / 200,000 = 35%Product Y: 30,000 / 200,000 = 15%Product Z: 100,000 / 200,000 = 50%The amount of joint costs allocated to each product is:Product X: 250,000 * 35% = $87,500Product Y: 250,000 * 15% = $37,500Product Z: 250,000 * 50% = $125,000

Spaniel Company Manufactures Three Products from a Joint Process Assuming the Relative- Sales- Value Method of Allocating Joint Costs