Net Realizable Value Method, Decision to Sell at Split-off or Process Further Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $60,000, and 13,000 units of ins and 37,000 units of outs were produced. Separable processing costs beyond the split-off point were as follows: ins, $94,000; outs, $465,000. Ins sell for $8.00 per unit; outs sell for $15.00 per unit. Required: 1. Allocate the $60,000 joint costs using the estimated net realizable value method. Ins Outs Allocated Joint Cost 2. Suppose that ins could be sold at the split-off point for $7.00 per unit. Should Arvin sell ins at split-off or process them further? Ins split-off. be processed further as there will be $ less more profit if sold at
Net Realizable Value Method, Decision to Sell at Split-off or Process Further Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $60,000, and 13,000 units of ins and 37,000 units of outs were produced. Separable processing costs beyond the split-off point were as follows: ins, $94,000; outs, $465,000. Ins sell for $8.00 per unit; outs sell for $15.00 per unit. Required: 1. Allocate the $60,000 joint costs using the estimated net realizable value method. Ins Outs Allocated Joint Cost 2. Suppose that ins could be sold at the split-off point for $7.00 per unit. Should Arvin sell ins at split-off or process them further? Ins split-off. be processed further as there will be $ less more profit if sold at
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...
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![Net Realizable Value Method, Decision to Sell at Split-off or Process Further
Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $60,000, and
13,000 units of ins and 37,000 units of outs were produced. Separable processing costs beyond the split-off point were
as follows: ins, $94,000; outs, $465,000. Ins sell for $8.00 per unit; outs sell for $15.00 per unit.
Required:
1. Allocate the $60,000 joint costs using the estimated net realizable value method.
Ins
Outs
2. Suppose that ins could be sold at the split-off point for $7.00 per unit. Should Arvin sell ins at split-off or process
them further?
Ins
Allocated Joint Cost
split-off.
be processed further as there will be $
less
more
profit if sold at](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F081951e6-f346-4a60-ae13-602b45047e5f%2F95027cfe-4b72-407d-bce4-524c8db6e0a3%2Fiynkc3f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Net Realizable Value Method, Decision to Sell at Split-off or Process Further
Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $60,000, and
13,000 units of ins and 37,000 units of outs were produced. Separable processing costs beyond the split-off point were
as follows: ins, $94,000; outs, $465,000. Ins sell for $8.00 per unit; outs sell for $15.00 per unit.
Required:
1. Allocate the $60,000 joint costs using the estimated net realizable value method.
Ins
Outs
2. Suppose that ins could be sold at the split-off point for $7.00 per unit. Should Arvin sell ins at split-off or process
them further?
Ins
Allocated Joint Cost
split-off.
be processed further as there will be $
less
more
profit if sold at
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