185. CSO: 1C1f LOS: 1C1l
Fitzpatrick Corporation uses a joint manufacturing process in the production of two
products, Gummo and Xylo. Each batch in the joint manufacturing process yields 5,000
pounds of an intermediate material, Valdene, at a cost of $20,000. Each batch of Gummo
uses 60% of the Valdene and incurs $10,000 of separate costs. The resulting 3,000
pounds of Gummo sells for $10 per pound. The remaining Valdene is used in the
production of Xylo which incurs $12,000 of separable costs per batch. Each batch of
67
Xylo yields 2,000 pounds and sells for $12 per pound. Fitzpatrick uses the net realizable
value method to allocate the joint material costs. The company is debating whether or
not to process Xylo further into a new product, Zinten, which would incur an additional
$4,000 in costs and sell for $15 per pound. If Zinten is produced, income would increase
by
a. $2,000.
b. $5,760.
c. $14,000.
d. $26,000.
Bạn đang xem 185. - CMA EXAM SUPPORT PACKAGE 1
