Exercise 7.25 (Algorithmic)

Physical Units Method

Alomar Company manufactures four products from a joint

production process: barlon, selene, plicene, and corsol. The joint

costs for one batch are as follows:

At the split-off point, a batch yields 2,976 barlon, 3,274

selene, 3,423 plicene, and 5,209 corsol. All products are sold at

the split-off point: barlon sells for $17 per unit, selene sells

for $18 per unit, plicene sells for $25 per unit, and corsol sells

for $35 per unit.

Required:

1. Allocate the joint costs using the physical

units method. If required, round your percentage allocation to four

decimal places and round allocated costs to the nearest dollar.

Note: The total of the allocated cost does not equal to the one

provided in the question data due to rounding error.

2. Suppose that the products are weighted as

shown below:

Allocate the joint costs using the weighted average method. If

required, round your percentage allocation to four decimal places

and round allocated costs to the nearest dollar.