Distribute the combined cost using the gross profit rate

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TOPRAK company produces the G10 and H8 products after the separation point, and after the additional cost expense of $ 15,000 for the G10 product and $ 45,000 for the H8 product, new products are produced under the names Super G10 and Super H8. 250 kg from Super G10 and 400 kg from Super H8 are produced. The sales price of Super G10 is 400 dollars / kg, and the sales price of Super H8 is 800 dollars / kg. Total combined costs up to the point of separation are $ 255,000.

If desired, the G10 product can be sold for $ 30,000 at the point of separation, and the H8 product for $ 70,000. According to these data;

Question a) Distribute the combined cost using the gross profit rate method.

Question b) In your opinion, should the enterprise subject G10 and H8 products to additional production? Please explain.

Question c) Distribute the combined cost on the assumption that 420 kg of finished products with a market value of 10 dollars / kg are released before the separation point

Reference no: EM132562621

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