The following information relates to a joint production process for three products, with a total joint production cost of $200,000. There are no separable processing costs for any of the three products. Product Sales Value at Split-Off Units at Split-Off 1 $ 280,000 585 2 80,000 1,170 3 40,000 2,145 $ 400,000 3,900 Assume that the total sales value at the split-off point for product 1 is $120,000 instead of $280,000 and the sales value of product 3 is $4,000 instead of $40,000. Assume also that the firm treats product 3 as a joint product and uses the net realizable value method for accounting for joint costs. There are no separable processing costs for product 3. What amount of joint costs would be allocated to the three products using the relative sales value method?
The following information relates to a joint production process for three products, with a total joint production cost of $200,000. There are no separable processing costs for any of the three products. Product Sales Value at Split-Off Units at Split-Off 1 $ 280,000 585 2 80,000 1,170 3 40,000 2,145 $ 400,000 3,900 Assume that the total sales value at the split-off point for product 1 is $120,000 instead of $280,000 and the sales value of product 3 is $4,000 instead of $40,000. Assume also that the firm treats product 3 as a joint product and uses the net realizable value method for accounting for joint costs. There are no separable processing costs for product 3. What amount of joint costs would be allocated to the three products using the relative sales value method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information relates to a joint production process for three products, with a total joint production cost of $200,000. There are no separable
| Product | Sales Value at Split-Off | Units at Split-Off |
|---|---|---|
| 1 | $ 280,000 | 585 |
| 2 | 80,000 | 1,170 |
| 3 | 40,000 | 2,145 |
| $ 400,000 | 3,900 |
Assume that the total sales value at the split-off point for product 1 is $120,000 instead of $280,000 and the sales value of product 3 is $4,000 instead of $40,000. Assume also that the firm treats product 3 as a joint product and uses the net realizable value method for accounting for joint costs. There are no separable processing costs for product 3. What amount of joint costs would be allocated to the three products using the relative sales value method?
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