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 14,000 units of ins and 36,000 units of outs were produced. Separable processing costs beyond the split-off point were as follows: ins, $102,000; outs, $450,000. 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. Allocated Joint Cost Ins $fill in the blank 1 Outs $fill in the blank 2 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 be processed further as there will be $fill in the blank 4 profit if sold at split-off.
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 14,000 units of ins and 36,000 units of outs were produced. Separable
Required:
1. Allocate the $60,000 joint costs using the estimated net realizable value method.
| Allocated Joint Cost | |
| Ins | $fill in the blank 1 |
| Outs | $fill in the blank 2 |
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
be processed further as there will be $fill in the blank 4
profit if sold at split-off.
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