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Scotland Beauty Products manufactures face cream, body lotion, and liquid soap in a joint manufacturing process. At the split-off point, the company has 300 pounds of face cream, 200 pounds of body lotion, and 300 pounds of liquid soap and has incurred $200,000 in joint costs. Using the weighted average method, allocate the joint costs to (a) face cream with a weight factor of 1, (b) body lotion with a weight factor of 3, and (c) liquid soap with a weight factor of 1.

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ebrightosagie

Answer: Face cream = 25/100 * $200000

= $50,000

Body lotion = 50/100 * $200000

= $100,000

Liquid soap = 25/100 * $200,000

= $50,000

Explanation:

Formula used:

Weight factors

Face cream =300

Body lotion = 200 * 3 = 600

Liquid soap = 300

Total weight factor = 1200 pounds

Percentage of total= Weights / Total weight factor *100

Face cream = 300/1200 * 100 = 25%

Body lotion = 600/1200 * 100 = 50%

Liquid soap = 300/1200 *100 = 25%

Allocation of cost= $200,000 × percentage of total

Face cream = 25/100 * $200000

= $50,000

Body lotion = 50/100 * $200000

= $100,000

Liquid soap = 25/100 * $200,000

= $50,000

jepessoa

Answer:

A) face cream = $50,000

B) body lotion = $100,000

C) liquid soap = $50,000

Explanation:

product                 quantity           weight factor           final quantity        

face cream              300                      1                             300

body lotion              200                     3                             600

liquid soap              300                      1                              300

total                                                                                    1,200

total joint costs = $200,000

joint cost per weighted pound = $200,000 / 1,200 = $166,67

allocated joint costs:

product               final quantity        cost per unit         total

face cream              300                      $166,67            $50,000

body lotion              600                     $166,67            $100,000

liquid soap               300                     $166,67            $50,000

total                        1,200                                             $200,000

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