Answer the following questions using the information below:
The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:
The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $760,000.
-What are the physical-volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?
A)59.00% and 41.00%
B)60.82% and 39.18%
C)39.18% and 60.82%
D)59.79% and 40.21%

Question

Answer the following questions using the information below:
The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:
    The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $760,000.
-What are the physical-volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?
A)59.00% and 41.00% 
B)60.82% and 39.18% 
C)39.18% and 60.82% 
D)59.79% and 40.21%

Quizplus · Accepted Answer

To find out the physical-volume proportion, we need to calculate the physical output of each product divided by the total physical output.
Mr. DirtOut: 162,500 / 242,500 = 0.671
Mr. SinkClean: 80,000 / 242,500 = 0.329
Therefore, the physical-volume proportions are 67.1% for Mr. DirtOut and 32.9% for Mr. SinkClean.
The best choice is B because it is the only option that reflects these proportions.

Answer the Following Questions Using the Information Below