Exercise 11-41 (Algo) Net Realizable Value Method: Multiple Choice (LO 11-7) Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,100 gallons of Chem-X with a cost of $99,000. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 24,200 $ 5.00 $ 2.00 $ 6.00 M-20 15,400 $ 10.00 $ 4.00 $ 16.00 B-60 5,500 $ 0.50 NA NA Oak View Chemicals uses the net realizable at split-off approach to allocate joint costs and treats the sales value of the by-product B-60 as other income. Required: The joint cost allocated to product M-10 at Oak View Chemicals for a given batch is: Multiple Choice $60,500 $43,560 $42,350 $36,708 None of the above.
Exercise 11-41 (Algo) Net Realizable Value Method: Multiple Choice (LO 11-7) Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,100 gallons of Chem-X with a cost of $99,000. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 24,200 $ 5.00 $ 2.00 $ 6.00 M-20 15,400 $ 10.00 $ 4.00 $ 16.00 B-60 5,500 $ 0.50 NA NA Oak View Chemicals uses the net realizable at split-off approach to allocate joint costs and treats the sales value of the by-product B-60 as other income. Required: The joint cost allocated to product M-10 at Oak View Chemicals for a given batch is: Multiple Choice $60,500 $43,560 $42,350 $36,708 None of the above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 11-41 (Algo) Net Realizable Value Method: Multiple Choice (LO 11-7)
Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,100 gallons of Chem-X with a cost of $99,000. Additional information regarding a batch follows.
| If Processed Further | ||||||||||||
| Product | Units Produced | Unit Sales Value at Split-off | Additional Costs (Per Unit) | Sales Value (Per Unit) | ||||||||
| M-10 | 24,200 | $ | 5.00 | $ | 2.00 | $ | 6.00 | |||||
| M-20 | 15,400 | $ | 10.00 | $ | 4.00 | $ | 16.00 | |||||
| B-60 | 5,500 | $ | 0.50 | NA | NA | |||||||
Oak View Chemicals uses the net realizable at split-off approach to allocate joint costs and treats the sales value of the by-product B-60 as other income.
Required:
The joint cost allocated to product M-10 at Oak View Chemicals for a given batch is:
Multiple Choice
-
$60,500
-
$43,560
-
$42,350
-
$36,708
-
None of the above.
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