Which basis of allocating the cost is most likely

Assignment Help Accounting Basics
Reference no: EM13137403

A company manufactures two products, X and Y, from a single raw material called ZZ. ZZ is purchased in 55-gallon drums, and the contents of one drum are sufficient to produce 30 gallons of X and 15 gallons of Y. X sells for $10.00 per gallon and Y sells for $30.00 per gallon. During the current period, the company used 400 drums of ZZ to manufacture X and Y. The cost of ZZ was $90 per drum.

Required:

(1) If the cost of ZZ is allocated to the X and Y products on the basis of the number of gallons produced, how much of the total cost of the 400 drums should be charged to each product?
(2) If the cost of ZZ is allocated to the X and Y products in proportion to their market values, how much of the total cost of the 400 drums should be charged to each product?
(3) Which basis of allocating the cost is most likely to be used by the company?

Reference no: EM13137403

Questions Cloud

Risk assessment : LEARNING OUTCOMES BEING ASSESSED 1. Demonstrate an understanding of the principles underlying the development of marketing strategies, especially in relation to services and consumer goods; 2. Describe the role of the marketer, and the marketer's con..
Explain what is the acceleration of the aircraft : What is the acceleration of the aircraft (in m/s2)? How long does it take the aircraft to reach its take-off speed?
How many ways can five taxi drivers be assigned to six cars : Last semester a certain professor gave 13 as out of 285 grades. if grades were assigned randomly what is the probability of an A.
Asset and liability in the financial records : Johntech accounted for the lease as a capital lease and recorded an asset and a liability in the financial records. The asset recorded under this lease should properly be amortized over:
Which basis of allocating the cost is most likely : If the cost of ZZ is allocated to the X and Y products on the basis of the number of gallons produced, how much of the total cost of the 400 drums should be charged to each product?
Explain how a monopolist can increase profits : What is the main difference between the demand curves for the perfect competitor and the monopolist?  Explain the difference between the firm's demand curve for each and then for the market for each.
Explain horsepower and efficiency of three-phase motor : Horsepower and efficiency of three-phase motor, If a fully loaded 440V, three-phase motor draws 12.4 A at 86% power factor (pf). It's speed is 1730 rpm and its torque output to a mechanical load is 29.1 lb-ft x 1.356 = 39.5 Nm.
Identify population and sample for humidity set : The amount of food consumed by each rat with humidity set at 20% and again with humidity set at 60%. For this study, identify (a)the population and (b) the sample.
Explain the true altitude of the plane above sea level : What is the true altitude of the plane above sea level? What would be the indicated altitude after landing at an aerodrome located at sea level? (Gas const = R=288 J/KgK)

Reviews

Write a Review

Accounting Basics Questions & Answers

  Net income and comprehensive income

Murphy Co. had 200,000 shares outstanding of $10 par common stock on March 30 of the current year. Murphy reacquired 30,000 of those shares at a cost of $15 per share and recorded the transaction using the cost method on April 15.

  Assessing workplace behavior

What have you learned about how you work as an individual? How have you changed your behaviour or approach to the workplace as a result of what you have learned? How has this helped improve work outputs or business results in your area?

  Explain the role of the ifrs foundation

Explain the role of the IFRS Foundation and show how the bodies which make up the Foundation contribute to the fulfilment of that role.the answer should include what is IFRS(International Financial Reporting Standards), the role of the IFRS Founda..

  Companies variable-costing net income

The company plans on producing 40,000 units and actually did, Sales totaled 37,000 at $42 each. Costs: The companies variable-costing net income would be:

  Case study of first chance casino

The First Chance Casino has a gambling facilities, bar, restaurant, and hotel. All employees are permited to obtain food from the restaurant at no charge throughtout working hours.

  Original cost of the computer to stark

Assuming the computer has a ten-year life and will have no salvage value at the expiration of the lease, what was the original cost (present value) of the computer to Stark?

  Diluted earnings per share

The bonds were issued four years ago at par ($2,000,000), carry a 7% interest rate, and are convertible into 40,000 shares of common stock. The company has a 40% tax rate. Diluted earnings per share are ??

  Net of depreciation-consolidated balance sheet

At what amount should the equipment (net of depreciation) be included on the consolidated balance sheet dated December 31, 2009?

  Prepare the journal entries to record the deferred

Management has determined that they should record a valuation allowance equal to the net deferred tax asset. Assuming a tax rate of 34%, prepare the journal entries to record the deferred tax provision and the valuation allowance.

  Inter-company transactions

Are there inter-company transactions between Target Corporation and its affiliated companies and did any of their affiliates sell shares of common stock to the public?

  Concept of marginal tax rate

Therefore, the S corporation sells the assets, resulting in a $90,000 capital gain, and liquidates. Assuming that Phil is subject to a marginal tax rate of 30%, what taxes are due?

  Determine the predetermined overhead rate for year 2011

In December 2010, Gomez Company's manager estimated next year's total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $15 per hour. The manager also estimated the following manufacturing over..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd