(allocating joint cost) In one joint process, Hardahl Chemical produces three joint products and one by-product. The following information is available for September 2008 Sales Value at Cost after Final SellingProduct Gallons Split-Off per gallon Split-Off Price Jp-4539 4,000 $12 $3 $21 JP-4587 16,000 8 5 14 JP-4591 12,000 15 2 19 Allocate the joint cost of $465,000 to the production on the a. Number of gallons; b. Sales value at split-off; and c. Approximated net realizable values at split-off.
Please give me the step only, thank you
To allocate the joint cost of $465,000 to the production, you need to follow these steps for each allocation method:
a. Number of gallons:
1. Calculate the total number of gallons produced for all the products.
2. Calculate the percentage of gallons for each product by dividing the gallons produced for each product by the total number of gallons.
3. Allocate the joint cost to each product by multiplying the percentage of gallons with the total joint cost.
b. Sales value at split-off:
1. Calculate the total sales value at split-off for all the products.
2. Calculate the percentage of sales value at split-off for each product by dividing the sales value at split-off for each product by the total sales value at split-off.
3. Allocate the joint cost to each product by multiplying the percentage of sales value at split-off with the total joint cost.
c. Approximated net realizable values at split-off:
1. Calculate the total approximated net realizable value at split-off for all the products.
2. Calculate the percentage of approximated net realizable value at split-off for each product by dividing the approximated net realizable value at split-off for each product by the total approximated net realizable value at split-off.
3. Allocate the joint cost to each product by multiplying the percentage of approximated net realizable value at split-off with the total joint cost.
Please note that the values for "sales value at cost after final selling" are not used in the allocation process.