As a start-up company, Blue Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Laura is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Laura is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. $53,750 $406,000 $20,000 87.5% Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. The intern must have used the Net Realizable Value Method method. eTextbook and Media (b) Attempts: 1 of 3 used Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) (1) The joint process $ (2) Further processing of product Y $
As a start-up company, Blue Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Laura is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Laura is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. $53,750 $406,000 $20,000 87.5% Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. The intern must have used the Net Realizable Value Method method. eTextbook and Media (b) Attempts: 1 of 3 used Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) (1) The joint process $ (2) Further processing of product Y $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:As a start-up company, Blue Enterprises encourages its employees to think through the entire value chain to estimate whether it
might be worthwhile to take a risk on new products. As part of that program, Laura is reviewing a product concept that her intern
presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be
sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high-
value product. Laura is intrigued enough to dig further into her intern's quantitative analysis, as follows.
Sales value of X immediately after the joint process
Sales value of Y after further processing
Product X's share of the joint process cost
Proportion of joint cost allocated to Product Y
(a)
Your answer is correct.
$53,750
$406,000
$20,000
87.5%
Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs
to these products.
The intern must have used the Net Realizable Value Method
method.
eTextbook and Media
(b)
Attempts: 1 of 3 used
Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of
product Y. (Round answers to O decimal places, e.g. 5,125.)
(1) The joint process $
(2) Further processing of product Y
$
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education