Bond Corporation, which manufactures Products W, X, Y, and Z through a joint process costing $18,000, has the following data for 2011: What is the amount of joint costs assigned to Product Y using the sales-value-at-split-off method?

Question

Bond Corporation, which manufactures Products W, X, Y, and Z through a joint process costing $18,000, has the following data for 2011:  What is the amount of joint costs assigned to Product Y using the sales-value-at-split-off method?

Quizplus · Accepted Answer

Using the sales-value-at-split-off method, the joint costs are allocated to each product based on their relative sales value at the split-off point. Total sales value at the split-off point is $100,000 ($25,000 + $30,000 + $30,000 + $15,000). 
Product Y has a sales value of $30,000, which represents 30% of the total sales value at split-off ($30,000/$100,000). Therefore, the joint costs assigned to Product Y would be $5,400 (30% x $18,000).

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