Davenport Company buys Alpha-11 for $6 a gallon. At the end of distilling in Department A, Alpha-11 splits off into three products: Beta- 1, Beta-2, and Beta-3. Davenport sells Beta-1 at the split-off point, with no further processing; it processes Beta-2 and Beta-3 further before they can be sold. Beta-2 is fused in Department B, and Beta-3 is solidified in Department C. Following is a summary of costs and other related data for the year ended November 30. Department Cost of Alpha-11 Direct labor Manufacturing overhead 0 (1) Distilling (2) Fusing (3) Solidifying $719,000 0 $342,000 $493,000 163,000 403,000 172,000 150,000 Products Beta-1 Gallons sold 185,000 Beta-2 370,000 Beta-3 555,000 S Gallons on hand at year-end Sales 124,000 $740,000 0 $2,220,000 184,000 $3,330,000 Davenport had no beginning inventories on hand at December 1 and no Alpha-11 on hand at the end of the year on November 30. All gallons on hand on November 30 were complete as to processing. Davenport uses the net realizable value method to allocate joint costs. Required: Compute the following: a. The net realizable value of Beta-1 for the year ended November 30. b. The joint costs for the year ended November 30 to be allocated. c. The cost of Beta-2 sold for the year ended November 30. (Do not round intermediate calculations. Round your final answer to the
Davenport Company buys Alpha-11 for $6 a gallon. At the end of distilling in Department A, Alpha-11 splits off into three products: Beta- 1, Beta-2, and Beta-3. Davenport sells Beta-1 at the split-off point, with no further processing; it processes Beta-2 and Beta-3 further before they can be sold. Beta-2 is fused in Department B, and Beta-3 is solidified in Department C. Following is a summary of costs and other related data for the year ended November 30. Department Cost of Alpha-11 Direct labor Manufacturing overhead 0 (1) Distilling (2) Fusing (3) Solidifying $719,000 0 $342,000 $493,000 163,000 403,000 172,000 150,000 Products Beta-1 Gallons sold 185,000 Beta-2 370,000 Beta-3 555,000 S Gallons on hand at year-end Sales 124,000 $740,000 0 $2,220,000 184,000 $3,330,000 Davenport had no beginning inventories on hand at December 1 and no Alpha-11 on hand at the end of the year on November 30. All gallons on hand on November 30 were complete as to processing. Davenport uses the net realizable value method to allocate joint costs. Required: Compute the following: a. The net realizable value of Beta-1 for the year ended November 30. b. The joint costs for the year ended November 30 to be allocated. c. The cost of Beta-2 sold for the year ended November 30. (Do not round intermediate calculations. Round your final answer to the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Davenport Company buys Alpha-11 for $6 a gallon. At the end of distilling in Department A, Alpha-11 splits off into three products: Beta-
1, Beta-2, and Beta-3. Davenport sells Beta-1 at the split-off point, with no further processing; it processes Beta-2 and Beta-3 further
before they can be sold. Beta-2 is fused in Department B, and Beta-3 is solidified in Department C. Following is a summary of costs
and other related data for the year ended November 30.
Department
Cost of Alpha-11
Direct labor
Manufacturing overhead
0
(1) Distilling (2) Fusing
(3) Solidifying
$719,000
0
$342,000
$493,000
163,000
403,000
172,000
150,000
Products
Beta-1
Gallons sold
185,000
Beta-2
370,000
Beta-3
555,000
S
Gallons on hand at year-end
Sales
124,000
$740,000
0
$2,220,000
184,000
$3,330,000
Davenport had no beginning inventories on hand at December 1 and no Alpha-11 on hand at the end of the year on November 30. All
gallons on hand on November 30 were complete as to processing. Davenport uses the net realizable value method to allocate joint
costs.
Required:
Compute the following:
a. The net realizable value of Beta-1 for the year ended November 30.
b. The joint costs for the year ended November 30 to be allocated.
c. The cost of Beta-2 sold for the year ended November 30. (Do not round intermediate calculations. Round your final answer to the
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