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:

The cost of purchasing 400 kgs of direct materials and processing it up to the split-off point to yield a total of 16,800 chips of good products was $1,950,000. Beginning inventories totalled 140 chips for Standard and 90 chips for Premium. Ending inventory amounts reflected 140 chips of Standard and 90 chips of Premium. October costs per unit were the same as November. When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated Standard chips? (Round intermediary percentages to the nearest hundredth.)
A) $1,226,415
B) $1,189,623
C) $975,000
D) $1,160,640

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:

The cost of purchasing 400 kgs of direct materials and processing it up to the split-off point to yield a total of 16,800 chips of good products was $1,950,000. Beginning inventories totalled 140 chips for Standard and 90 chips for Premium. Ending inventory amounts reflected 140 chips of Standard and 90 chips of Premium. October costs per unit were the same as November. When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated Standard chips? (Round intermediary percentages to the nearest hundredth.)
A) $1,226,415 
B) $1,189,623 
C) $975,000 
D) $1,160,640

Quizplus · Accepted Answer

Standard: 10,000 / (10,000 + 6800) = 59.52%
Joint costs allocated to Standard chips = $1,950,000 × 59.52% = $1,160,640

Netzone Company Is in Semiconductor Industry and Fabrication of Silicon-Wafer