Calculate NRV method? Caribu Company produces sanitation products after processing specialized chemicals; Thefollowing relates to its activities:1 Kilogram of chemicals purchased for $2000 and with an additional $1000 isprocessed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre.At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent ispackaged at an additional cost of $300 and made into 200 packs of Softener that canbe sold for $2 per pack.

Joint cost allocation is needed to be done when after the split-off point a product is changed into…

Answered: Calculate NRV method?

Business

Accounting

Calculate NRV method?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Calculate NRV method?

Caribu Company produces sanitation products after processing specialized chemicals; The
following relates to its activities:
1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is
processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, a
gram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre.
At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500
grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is
packaged at an additional cost of $300 and made into 200 packs of Softener that can
be sold for $2 per pack.

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