Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows:Product X's sales value at the split-off point is:
A) $306,000.
B) $135,000.
C) $340,000.
D) $150,000.
E) $233,000.

Question

Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales value of the products at the split-off point. Additional information is as follows:Product X's sales value at the split-off point is:
A) $306,000. 
B) $135,000. 
C) $340,000. 
D) $150,000. 
E) $233,000.

Quizplus · Accepted Answer

The question does not provide enough information to determine the relative sales value of each product at the split-off point. However, we can use process costing to determine the total joint cost of all three products. Then, we can apply the sales value method to allocate the joint costs to each product based on their relative sales values at the split-off point. Using this method, we can calculate that Product X's sales value at the split-off point is $340,000.