HGT Corporation produces four products from a common production process. Selected data from HGT's accounting system for the four products appears below: Joint costs for the accounting period totalled $5,000. Each product line has a different product manager who is evaluated based on product line profitability. Therefore each manager is motivated to reduce his / her total product line costs as much as possible. The managers have been given information about potential joint cost allocations using the following three methods: physical output, sales at split-off point, and net realizable value. The managers are comparing the joint cost allocations under each method so that they can give the accountant input about their preferred method(s).
If HGT allocates joint costs using the sales value at split-off point method, the total joint cost allocated to full-body pillows (rounded to the nearest dollar) will be:

Question

HGT Corporation produces four products from a common production process. Selected data from HGT's accounting system for the four products appears below:  Joint costs for the accounting period totalled $5,000. Each product line has a different product manager who is evaluated based on product line profitability. Therefore each manager is motivated to reduce his / her total product line costs as much as possible. The managers have been given information about potential joint cost allocations using the following three methods: physical output, sales at split-off point, and net realizable value. The managers are comparing the joint cost allocations under each method so that they can give the accountant input about their preferred method(s).
If HGT allocates joint costs using the sales value at split-off point method, the total joint cost allocated to full-body pillows (rounded to the nearest dollar) will be:

Quizplus · Accepted Answer

The Answer of HGT Corporation produces four products from a common production process. Selected data from HGT's accounting system for the four products appears below:  Joint costs for the accounting period totalled $5,000. Each product line has a different product manager who is evaluated based on product line profitability. Therefore each manager is motivated to reduce his / her total product line costs as much as possible. The managers have been given information about potential joint cost allocations using the following three methods: physical output, sales at split-off point, and net realizable value. The managers are comparing the joint cost allocations under each method so that they can give the accountant input about their preferred method(s).
If HGT allocates joint costs using the sales value at split-off point method, the total joint cost allocated to full-body pillows (rounded to the nearest dollar) will be:

HGT Corporation Produces Four Products from a Common Production Process