Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows. DBB-1 DBB-2 DBB-3 Total Units Sold 19,800 29,700 41,700 91,200 Price (after additional processing) $ 65 $ 50 $ 75 Separable Processing cost $ 136,125 $ 54,450 $ 76,450 $ 267,025 Units Produced 19,800 29,700 41,700 91,200 Total Joint Cost $ 4,360,000 Sales Price at Split-off $ 25 $ 35 $ 55 The amount of joint costs allocated to product DBB-3 using the net realizable value method is: Multiple Choice $2,361,764. $1,228,747. $1,107,364. $1,150,875. $890,872.
Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows. DBB-1 DBB-2 DBB-3 Total Units Sold 19,800 29,700 41,700 91,200 Price (after additional processing) $ 65 $ 50 $ 75 Separable Processing cost $ 136,125 $ 54,450 $ 76,450 $ 267,025 Units Produced 19,800 29,700 41,700 91,200 Total Joint Cost $ 4,360,000 Sales Price at Split-off $ 25 $ 35 $ 55 The amount of joint costs allocated to product DBB-3 using the net realizable value method is: Multiple Choice $2,361,764. $1,228,747. $1,107,364. $1,150,875. $890,872.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows.
| DBB-1 | DBB-2 | DBB-3 | Total | |
|---|---|---|---|---|
| Units Sold | 19,800 | 29,700 | 41,700 | 91,200 |
| Price (after additional processing) | $ 65 | $ 50 | $ 75 | |
| Separable |
$ 136,125 | $ 54,450 | $ 76,450 | $ 267,025 |
| Units Produced | 19,800 | 29,700 | 41,700 | 91,200 |
| Total Joint Cost | $ 4,360,000 | |||
| Sales Price at Split-off | $ 25 | $ 35 | $ 55 |
The amount of joint costs allocated to product DBB-3 using the net realizable value method is:
Multiple Choice
-
$2,361,764.
-
$1,228,747.
-
$1,107,364.
-
$1,150,875.
-
$890,872.
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