Johns Company manufactures products R, S, and T from a joint process. The following information is available: Assuming that joint product costs are allocated using the relative-sales-value at split-off approach, what was the sales value at split-off for products R and S?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Johns Company manufactures products R, S, and T from a joint process. The following information is available:  Assuming that joint product costs are allocated using the relative-sales-value at split-off approach, what was the sales value at split-off for products R and S? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Relative sales value at split-off is calculated by dividing the sales value of each product at split-off by the total sales value of all products at split-off.

For Product R: 
($90,000 ÷ $180,000) x 100% = 50%

For Product S: 
($60,000 ÷ $180,000) x 100% = 33.33%

Therefore, the sales value at split-off for Products R and S are: 
Product R: 50% x $180,000 = $90,000 
Product S: 33.33% x $180,000 = $60,000

Option C shows these values.

Johns Company Manufactures Products R, S, and T from a Joint