Serene Dairy has four product lines: sour cream ice cream yogurt and butter.The total cost of producing the milk base for the products is $45000 which has been allocated based on the gallons of milk base used by each product.Results for July follow: $\begin{array} { l }
& \text {Sour Cream }& \text { Ice Cream}& \text { Yogurt}& \text { Butter }& \text { Total}\
\text {Units sold }&2,000&500&400&2,000&4,900\
\text {revenue }&\$10,000&\$20,000&\$10,000&\$20,000&\$60,000\
\text {Variable departmental costs }&6,000&13,000&4,200&4,800&28,000\
\text {Fixed costs }&5,000&2,000&3,000&7,000&17,000\
\text {Net income (loss) }&\$1,000&\$5,000&\$2,800&\$8,200&\$15,000\
\end{array}$
How much are total joint costs of the products?

Question

Serene Dairy has four product lines: sour cream ice cream yogurt and butter.The total cost of producing the milk base for the products is $45000 which has been allocated based on the gallons of milk base used by each product.Results for July follow: $\begin{array} { l  } 
& \text {Sour Cream  }& \text { Ice Cream}& \text { Yogurt}& \text { Butter }& \text { Total}\
 \text {Units sold }&2,000&500&400&2,000&4,900\
 \text {revenue }&\$10,000&\$20,000&\$10,000&\$20,000&\$60,000\
 \text {Variable departmental costs }&6,000&13,000&4,200&4,800&28,000\
 \text {Fixed costs }&5,000&2,000&3,000&7,000&17,000\
 \text {Net income (loss) }&\$1,000&\$5,000&\$2,800&\$8,200&\$15,000\
\end{array}$
 How much are total joint costs of the products?

Quizplus · Accepted Answer

The total joint costs of the products are the costs that are common to all products before they are split into individual products. In this case, the joint cost is the cost of producing the milk base, which is $45,000.

Serene Dairy Has Four Product Lines: Sour Cream Ice Cream