Iles Corporation produces four products in a joint process for $500,000.The following information is available on total sales and production in units: What amount of joint costs will be allocated to I based on the physical units method?

Question

Iles Corporation produces four products in a joint process for $500,000.The following information is available on total sales and production in units:  What amount of joint costs will be allocated to I based on the physical units method?

Quizplus · Accepted Answer

The physical units method allocates joint costs based on the number of physical units produced. To calculate the allocation, we need to first determine the total number of physical units produced: 10,000 + 12,000 + 15,000 + 8,000 = 45,000 units.

Next, we calculate the allocation rate: $500,000 / 45,000 units = $11.11 per unit.

Finally, we allocate the joint costs to each product based on the number of units produced: 
- Product I: 10,000 units x $11.11 per unit = $111,110 
- Product II: 12,000 units x $11.11 per unit = $133,332 
- Product III: 15,000 units x $11.11 per unit = $166,650 
- Product IV: 8,000 units x $11.11 per unit = $88,880

The total joint costs allocated to Product I is $111,110, which corresponds to choice A.

Iles Corporation Produces Four Products in a Joint Process for $500,000.The