(Solution) - Choi Company manufactures two skin care lotions Smooth Skin and -(2025 Original AI-Free Solution)

Paper Details

Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $420,000 for a standard production run that generates 180,000 pints of Smooth Skin and 120,000 pints of Silken Skin. Smooth Skin sells for $2.40 per pint, while Silken Skin sells for $3.90 per pint.

Required
1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin on a net realizable value basis?
2. If no additional costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin on the physical measure method basis?
3. If additional processing costs beyond the split-off point are $1.40 per pint for Smooth Skin and $0.90 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin on a net realizable value basis?
4. If additional processing costs beyond the split-off point are $1.40 per pint for Smooth Skin and $0.90 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Smooth Skin on a physical measure method basis?
(CMA Adapted)