Laredo Corporation, which manufactures products W, X, Y, and Z through a joint process costing $24,000, has the following data for 2014: What is the amount of joint costs assigned to product W using the physical units method?

Question

Laredo Corporation, which manufactures products W, X, Y, and Z through a joint process costing $24,000, has the following data for 2014:  What is the amount of joint costs assigned to product W using the physical units method?

Quizplus · Accepted Answer

The physical units method assigns joint costs based on the number of physical units produced for each product. In this case, product W accounts for 2,000 out of the total 8,000 physical units produced (500 for product X, 3,000 for product Y, and 2,500 for product Z). Therefore, the amount of joint costs assigned to product W would be 2,000/8,000 x $24,000 = $6,000.

Laredo Corporation, Which Manufactures Products W, X, Y, and Z