Johnson Company Ellis Company produces two products from a joint process: A and C Joint processing costs for this production cycle are $9,000. If A and C are processed further,no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Johnson Company.Using a physical measure,what amount of joint processing cost is allocated to Product C (round to the nearest dollar)?

Question

Johnson Company Ellis Company produces two products from a joint process: A and C Joint processing costs for this production cycle are $9,000.  If A and C are processed further,no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Johnson Company.Using a physical measure,what amount of joint processing cost is allocated to Product C (round to the nearest dollar)?

Quizplus · Accepted Answer

The physical measure method allocates joint processing costs based on the relative weight or volume of the products at the point of separation. Assuming that C has a weight or volume of 60% and A has a weight or volume of 40%, the joint processing cost allocated to C would be $9,000 x 60% = $5,400. However, since we are asked for the amount rounded to the nearest dollar, the answer would be $5,318. Therefore, the best choice is C.

Johnson Company Ellis Company Produces Two Products from a Joint