Product X is sold for $32 a unit and Product Y is sold for $48 a unit. Each product can also be sold at the splitoff point. Product X can be sold for $10 and Product Y for $8. Joint costs for the two products totaled $2,000 for January for 300 units of X and 250 units of Y. What are the respective joint costs assigned each unit of products X and Y if the sales value at splitoff method is used?
A)$2.96 and $4.44
B)$4.00 and $4.55
C)$4.00 and $3.20
D)$4.55 and $4.55

Question

Quizplus · Accepted Answer

The sales value at splitoff method assigns joint costs based on the relative sales value at the splitoff point. Product X's sales value is $10 * 300 = $3,000, and Product Y's sales value is $8 * 250 = $2,000. The total sales value is $5,000. The joint cost allocation for X is ($3,000/$5,000) * $2,000 = $1,200, and for Y is ($2,000/$5,000) * $2,000 = $800. The cost per unit for X is $1,200/300 = $4.00, and for Y is $800/250 = $3.20.

Product X Is Sold for $32 a Unit and Product