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    Assignment Le Monde Company

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    Mohammad Nur Hasan
    The document discusses a company called Le Monde that produces chemicals. It provides data on the company's joint production costs for October and the allocation of those costs to specific chemicals. It also determines the dollar value of finished goods inventories and analyzes whether to sell one chemical at an earlier production point.

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    © All Rights Reserved
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    Assignment Le Monde Company

    Uploaded by

    Mohammad Nur Hasan
    175 views5 pages
    The document discusses a company called Le Monde that produces chemicals. It provides data on the company's joint production costs for October and the allocation of those costs to specific chemicals. It also determines the dollar value of finished goods inventories and analyzes whether to sell one chemical at an earlier production point.

    Original Title

    03. 230910 - Assignment Le Monde Company

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    The document discusses a company called Le Monde that produces chemicals. It provides data on the company's joint production costs for October and the allocation of those costs to specific chemicals. It also determines the dollar value of finished goods inventories and analyzes whether to sell one chemical at an earlier production point.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    175 views5 pages

    Assignment Le Monde Company

    Uploaded by

    Mohammad Nur Hasan
    The document discusses a company called Le Monde that produces chemicals. It provides data on the company's joint production costs for October and the allocation of those costs to specific chemicals. It also determines the dollar value of finished goods inventories and analyzes whether to sell one chemical at an earlier production point.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    Assignment : Le Monde Company

    Mohammad Nur Hasan | 2306301826


    Case

    Le Monde Company is a manufacturer of chemicals for various purposes. One of the Processes used by Le Monde
    produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that
    is sold to fertilizer manufacturers. Le Monde uses the net-realizable-value method to allocated joint process remains consisten from
    month to month. Le Monde Company uses FIFO (firs-in-first-out) in valuing its finished-goods inventories.
    Data regarding operations for the month of October are as follows. During this month. Le Monde in incurred joint production
    costs of $136,000 in the manufacture of HTP-3, PST-4 dan RJ-5.
    Required

    1. Determine Le Monde Company’s allocation of joint production costs for the month of October. (Carry calculation of relative
    proportions to four decimal places)

    2. Determine the dollar values of the finished-goods inventories for HTP-3, PST-4, and RJ-5 as of October 31. (Round the cost per
    gallon to the nearest cent).

    3. Suppose Le Monde Company has a new opportunity to sell PST-4 at the split-off point for $3.03 per gallon. Perpare an analysis
    showing whether the company should sell PST-4 at the split-off point or continue to process this product further.
    Solution
    1 Determine Le Monde Company’s allocation of joint production costs for the month of October. (Carry calculation of relative proportions to four decimal places)

    Joint Market Additional Hypotetical Hypotetical Relative Allocated


    Products Price Processing costs Market Price Market Value Proportion Joint Cost
    HTP-3 $ 3.20 $ 1.00 $ 2.20 $ 154,080.00 48.1500% $ 65,484.00
    PST-4 $ 4.80 $ 1.87 $ 2.93 $ 102,720.00 32.1000% $ 43,656.00
    RJ-5 $ 4.00 $ 0.28 $ 3.72 $ 63,200.00 19.7500% $ 26,860.00
    Total $ 320,000.00 $ 136,000.00

    2 Determine the dollar values of the finished-goods inventories for HTP-3, PST-4, and RJ-5 as of October 31. (Round the cost per gallon to the nearest cent).

    HTP-3 PST-4 RJ-5


    Allocated joint cost $ 65,484.00 $ 43,656.00 $ 26,860.00
    Additional processing costs $ 69,920.00 $ 65,280.00 $ 4,800.00
    Total cost $ 135,404.00 $ 108,936.00 $ 31,660.00
    Quantity produced 70,000 35,000 17,000
    Cost per gallon (rounded) $ 1.93 $ 3.11 $ 1.86

    HTP-3 PST-4 RJ-5


    Q. Beginning Finished-goods 1,800 5,200 300
    Q. Production (+) 70,000 35,000 17,000
    Q. Sales (-) 65,000 32,500 15,000
    Q. Ending Finished-goods 6,800 7,700 2,300

    Cost per gallon $ 1.93 $ 3.11 $ 1.86


    Finished-goods balance as of October 31 $ 13,124.00 $ 23,947.00 $ 4,278.00
    Solution
    3 Suppose Le Monde Company has a new opportunity to sell PST-4 at the split-off point for $3.03 per gallon.
    Perpare an analysis showing whether the company should sell PST-4 at the split-off point or continue to process this product further.

    Firs sales value per gallons $ 4.80 a


    Price assumption at the split-off point $ 3.30 b
    $ 1.50 c = a-b
    Additional processing costs $ 1.87 d
    Variance $ (0.37) e = c-d

    Le Monde Company should sell PST-4 on current price, based on the calculation variance comes from discounting current sales price is unfavorable.

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