26 June, 11:26

# The Silver Center (TSC) produces cups and platters. TSC purchases silver and other metals that are processed into silver alloy that is used to make platters and cups. TSC incurred \$40,000 of materials cost and \$44,000 of labor cost to produce the silver alloy. Platters are made first and the residual alloy is remixed into a lower grade silver plated material that is used to make the cups. Remixing cost amount to \$2,000. The recent batch contained 4,000 platters and 1,000 cups. TSC sold the platters for \$100,000 and the cups for \$12,000. Based on this information the total amount of joint cost is? a. \$67,200. b. \$32,800. c. \$12,000. d. \$ (4,800).

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1. 26 June, 11:50
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The total amount of joint cost is \$32,800

Explanation:

Cost to be allocated : Allocation base = Allocation rate

(\$40,000 + \$44,000) : (4,000 platters + 1,000 cups)

= \$16.80 per unit

Allocation rate x Weight of the base = amount to allocate

\$16.80 x 4,000 units = \$67,200 to platters

\$16.80 x 1,000 units = \$16,800 to cups

Platters Cups

Sales \$ 100,000 \$12,000

Allocated joint cost (67,200) (16,800)

Further processing cost 0 (2,000)

Income \$32,800 \$ (6,800)