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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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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