Cariboo manufacturing company incurred a joint cost of $945,000 in the production of x and y in a joint process. presently, 2,900 of x and 2,500 of y are being produced each month. management plans to decrease x's production by 850 units in order to increase the production of y by 1,160 units. additionally, this change will require minor modifications, which will add $64,800 to the joint cost. this cost is entirely attributable to product y. what is the amount of the joint costs allocable to x and y before changes to existing production, assuming cariboo allocates their joint costs according to the proportion of y and x produced

the joint cost allocated to X before changes to existing production = $507,500

and

the joint cost allocated to Y before changes to existing production = $437,500

Explanation:

Given:

Joint cost incurred by the company = $945,000.

The number of units of X produced presently = 2,900

The number of units of Y produced presently = 2,500

Total joint units produced presently = 2,900 + 2,500 = 5,400 units

Therefore,

the total joint cost per joint unit

= (Joint cost incurred by the company) / (Total joint units produced presently )

on substituting the respective values, we have

the total joint cost per joint unit  = $945,000 / 5,400 = $175

Hence,

the joint cost allocated to X before changes to existing production

= $ 175 × number of units of X produced presently

= $175 × 2,900 = $507,500

and

the joint cost allocated to Y before changes to existing production

= $ 175 × number of units of Y produced presently

= $175 × 2,500 = $437,500

88 because 4 plus 4 equals 8. 40 plus 40 equals 80. 80 plus 8 equals 88

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