Foster Company incurred $200,000 to manufacture the following products in a joint process: $\begin{array}{|c|c|c|c|}
\hline \text { Product } & \text { Units Produced } & \text { Weight per Unit } & \begin{array}{c}
\text { Selling Price per } \
\text { Unit }
\end{array} \
\hline \mathrm{I} & 500 & 8 \mathrm{kgs} & \$ 5 \
\hline \mathrm{J} & 1,000 & 6 \mathrm{kgs} & 10 \
\hline \mathrm{K} & 1,500 & 4 \mathrm{kgs} & 10 \
\hline \mathrm{L} & 2,000 & 2 \mathrm{kgs} & 5 \
\hline
\end{array}$
-How much joint cost would be allocated to Product I based on the physical units method?

Question

Foster Company incurred $200,000 to manufacture the following products in a joint process: $\begin{array}{|c|c|c|c|}
\hline \text { Product } & \text { Units Produced } & \text { Weight per Unit } & \begin{array}{c}
\text { Selling Price per } \
\text { Unit }
\end{array} \
\hline \mathrm{I} & 500 & 8 \mathrm{kgs} & \$ 5 \
\hline \mathrm{J} & 1,000 & 6 \mathrm{kgs} & 10 \
\hline \mathrm{K} & 1,500 & 4 \mathrm{kgs} & 10 \
\hline \mathrm{L} & 2,000 & 2 \mathrm{kgs} & 5 \
\hline
\end{array}$ 
-How much joint cost would be allocated to Product I based on the physical units method?

Quizplus · Accepted Answer

The physical units method allocates joint costs based on the number of units produced. The total units produced are 500 (I) + 1,000 (J) + 1,500 (K) + 2,000 (L) = 5,000 units. Product I's share is 500/5,000 = 1/10 of the total cost. Therefore, the cost allocated to Product I is 1/10 of $200,000 = $20,000.

Foster Company Incurred $200,000 to Manufacture the Following Products in a Joint