Physical measure allocation

Allocated
Yards Proportion Joint Cost cost
X 1,500 0.405405405 8,000 3,243.24
Z 2,200 0.594594595 8,000 4,756.76
3,700 8,000.00

Sales value at Split-of

Sales price Total sales Allocated

Yards per yeard price at Proportion Joint Cost cost
at split-of split-of

X 1,500 6 9,000 0.3125 8,000 2,500.00

Z 2,200 9 19,800 0.6875 8,000 5,500.00
28,800 8,000.00

NRV at split-of

Sales price Disposal NRV

Yards per yeard cost NRV Proportion
per yard at split-of
at split-of

X 1,500 6 3.5 2.5 3,750.00 0.298804781

Z 2,200 9 5 4 8,800.00 0.701195219
12,550.00

Approximated NRV at Split-of

Final sale Sales price Incremental Incremental Incrementa

price per per yeard l
revenue cost
yard at split-of profit

X 7.5 6 2 1 0.50
Z 11.25 9 2 2 0.25

Final sale Further Approx.

Disposal
Yards price per processing cost NRV per Approx. NRV
per yard
yard per yard yard

X 1,500 7.5 1 3.5 3 4,500

Y 2,200 11.25 2 5 4.25 9,350
13,850
 Allocated
Joint Cost cost

8,000.00 2,390.44
8,000.00 5,609.56
8,000.00

Proportion Joint Cost Allocated

Cost

0.324909747 8,000 2599.28

0.675090253 8,000 5400.72
8,000.00
PROBLEM 2

Final sales Sales price Incremental Incremental

price at split-of revenue cost Incremental
profit

L 840,000 500,000 340,000 180,000 160,000.00

M 900,000 820,000 80,000 140,000 (60,000.00)
N 640,000 480,000 160,000 160,000 -
PROBLEM 3

Physical measure allocation

Barrels Proportion Joint cost Allocated cost
C 750 0.15 9,000 1,310.68
D 1,000 0.19 9,000 1,747.57
E 1,400 0.27 9,000 2,446.60
G 2,000 0.39 9,000 3,495.15
5,150 9,000.00

Sales Value at Split-of

Sales price per Total Sales
Pounds barrel at price at split- Proportion Joint cost
split-of of
C 750 10 7,500 0.12 9,000
D 1,000 8 8,000 0.13 9,000
E 1,400 11 15,400 0.25 9,000
G 2,000 15 30,000 0.49 9,000
60,900

NRV at Split-of
Disposal
Sales price per NRV per barrel
cost per Total NRV
Pounds barrel at at
barrel at at split-of
split-of split-of
split-of

C 750 10 6.5 3.50 2,625.00

D 1,000 8 4 4.00 4,000.00
E 1,400 11 7 4.00 5,600.00
G 2000 15 9.5 5.50 11,000.00
23,225.00
Approximated NRV at Split-of
Disposal
Sales price
Final cost per
per lb. at Incremental
sales price lb. at
split-of Revenue
per pound split-of

C 13.5 10 3.5 6.50

D 10 8 2 4.00
E 15.5 11 4.5 7.00
G 19.5 15 4.5 9.50

Approx. NRV
Pounds per lb. at Approx. NRV Proportion Joint cost
split-of at split-of
A 750 9.00 6,750.00 0.16 9,000.00
B 1,000 6.50 6,500.00 0.15 9,000.00
C 1,400 8.00 11,200.00 0.26 9,000.00
D 2,000 9.00 18,000.00 0.42 9,000.00
42,450.00
Allocated
cost

1,108.37
1,182.27
2,275.86
4,433.50
9,000.00
r

Allocated
Proportion Joint cost cost

0.11 9,000 1,017.22 4

0.17 9,000 1,550.05
0.24 9,000 2,170.08
0.47 9,000 4,262.65
9,000.00

Further Separate
Disposal
processing cost per Incremental Incremental
cost upon
per pound lb. after cost Profit
sale split-of

2.00 2.50 4.50 (2.00) 5.50 Process further

2.50 1.00 3.50 (0.50) 2.50 Process further
4.00 3.50 7.50 0.50 4.00 Process further
4.50 6.00 10.50 1.00 3.50 Process further

Allocated
joint cost
4.00
1,431.10
1,378.09
2,374.56
3,816.25
9,000.00
PROBLEM 3
Proportion Joint Cost - net Allocated cost
X 300,000 0.666666667 252,000 168,000
Y 150,000 0.333333333 252,000 84,000
450,000 252,000