1

3
4
a. The sales value at split off method
A
Allocation of Joint Costs Using Sales Value at Split Off Method
Sales value of total production at split off point
(1,200 tons x $50 per ton ; 800 x $75 per ton)
Weighting ($60,000 : $120,000 ; $60,000 : $120,000)
Joint costs allocated (0.50 x $100,000 ; 0.50 x $100,000)

b.The physical-measure method

A
Allocation of Joint Costs Using Physical-Measure Method
Physical measure of total production (tons)
Weighting (1,200 tons : 2,000 tons ; 800 tons : 2,000 tons)
Joint cost allocated (0.60 x $100,000 ; 0.40 x $100,000)

Net Realizable Value (NRV) Method

A
Allocation of Joint Costs Using Sales Value at Split Off
Final sales value of total production during accounting period
(1,200 tons x $50 per ton ; 500 tons x $200 per ton)
Deduct separable costs to complete and sell
Net realizable value at split off point
Weighting ($60,000 : $140,000 ; $80,000 : $140,000)
Joint costs allocated (3/7 x $100,000 ; 4/7 x $100,000)

a. Gross-margin percentage of caustic soda

A
Caustic Soda
Revenues (1,200 tons x $50 per ton)
Cost of goods sold (joint costs)
Gross margin
Gross margin percentage ($10,000 : $60,000 ; $0 : $60,000 ; $17,143 : $60,000)

b. Gross-margin percentage of PVC

A
PVC
Revenues (500 tons x $200 per ton)
Cost of good sold
Joint costs
Separable cost
Cost of good sold
Gross margin
Gross margin percentage ($30,000 : $100,000 ; $40,000 : $100,000 ; $22,857 : $100,000)
Sale of chlorine versus processing into PVC
A
Incremental revenue from processing 800 tons of chlorine into 500 tons of PVC
(500 tons x $200 pe ton) - (800 tons x $75 per ton)
Incremental cost of processing 800 tons of chlorine into 500 tons of PVC
Incremental operating income from further processing

If IC sells 800 tons of chlorine of Lifetime Swimming Pool Products instead of further processing it into PVC,its Aug

NAMA : Dwi Surya Nugraha

NIM : 20809334002
Kelas : A20 Wates
Prodi : D4 Akuntansi
 B C D
Caustic Soda PVC/Chlorine Total

$60,000 $60,000 $120,000

0.5 0.5
$50,000 $50,000 $100,000

B C D
Caustic Soda PVC/Chlorine Total
1,200 800 2,000
0.6 0.4
$60,000 $40,000 $100,000

B C D
Caustic Soda PVC Total

$60,000 $100,000 $160,000

0 20,000 20,000
$60,000 $80.000 $140,000
3/7 4/7
$42,857 $57,143 $100,000

B C D
Sales Value at Split off point Physical Measure NRV
$60,000 $60,000 $60,000
50,000 60,000 42,857
$10,000 $0 $17,143
16.67% 0.00% 28.57%

B C D
Sales Value at Split off point Physical Measure NRV
$100,000 $100,000 $100,000.00

50,000 40,000 57,143

20,000 20,000 20,000
70,000 60,000 77,143
$30,000 $40,000 $22,857
30.00% 40.00% 22.86%
 B

$40,000
20,000
$20,000

rther processing it into PVC,its August 2012 operating income will be reduced by $20,000