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 300 kgs of direct materials and processing it up to the split-off point to yield a total of 18,800 chips of good products was $2,030,000. Beginning inventories totalled 150 chips for Standard and 80 chips for Premium. Ending inventory amounts reflected 150 chips of Standard and 80 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 Premium chips? (Round intermediary percentages to the nearest hundredth.)
A) $734,251
B) $714,469
C) $1,015,000
D) $669,106

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 300 kgs of direct materials and processing it up to the split-off point to yield a total of 18,800 chips of good products was $2,030,000. Beginning inventories totalled 150 chips for Standard and 80 chips for Premium. Ending inventory amounts reflected 150 chips of Standard and 80 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 Premium chips? (Round intermediary percentages to the nearest hundredth.)
A) $734,251 
B) $714,469 
C) $1,015,000 
D) $669,106

Quizplus · Accepted Answer

Premium: 6800 / (12,000 + 6800) = 36.17%
Joint costs allocated to Premium chips = $2,030,000 × 36.17% = $734,251

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