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 1,140 gallons of Chem-X with a cost of $102,600. 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 25,080 $ 5.00 $ 2.00 $ 6.00 M-20 15,960 $ 10.00 $ 4.00 $ 16.00 B-60 5,700 $ 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 $62,700 $45,144 $43,890 $38,043 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 1,140 gallons of Chem-X with a cost of $102,600. 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 25,080 $ 5.00 $ 2.00 $ 6.00 M-20 15,960 $ 10.00 $ 4.00 $ 16.00 B-60 5,700 $ 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 $62,700 $45,144 $43,890 $38,043 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 1,140 gallons of Chem-X with a cost of $102,600. 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 | 25,080 | $ | 5.00 | $ | 2.00 | $ | 6.00 | |||||
| M-20 | 15,960 | $ | 10.00 | $ | 4.00 | $ | 16.00 | |||||
| B-60 | 5,700 | $ | 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
-
$62,700
-
$45,144
-
$43,890
-
$38,043
-
None of the above
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