Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in 1,000 gallon drums for $2,000. Processing costs are $3,000 to process the 1,000 gallons of Duo into 800 gallons of Big and 200 gallons of Mini. The selling price is $9 per gallon for Big and $4 per gallon for Mini. Big can be processed further into 600 gallons of Giant if $1,000 of additional processing costs are incurred. Giant can be sold for $17 per gallon. Question If Tucariz uses the net realizable value method to allocate costs to the joint products, the total cost of producing Giant is A.
Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in 1,000 gallon drums for $2,000. Processing costs are $3,000 to process the 1,000 gallons of Duo into 800 gallons of Big and 200 gallons of Mini. The selling price is $9 per gallon for Big and $4 per gallon for Mini. Big can be processed further into 600 gallons of Giant if $1,000 of additional processing costs are incurred. Giant can be sold for $17 per gallon. Question If Tucariz uses the net realizable value method to allocate costs to the joint products, the total cost of producing Giant is A.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Tucariz Company processes Duo
into two joint products, Big and
Mini. Duo is purchased in 1,000
gallon drums for $2,000.
Processing costs are $3,000 to
process the 1,000 gallons of Duo
into 800 gallons of Big and 200
gallons of Mini. The selling price is
$9 per gallon for Big and $4 per
gallon for Mini. Big can be
processed further into 600 gallons
of Giant if $1,000 of additional
processing costs are incurred.
Giant can be sold for $17 per
gallon. Question If Tucariz uses
the net realizable value method to
allocate costs to the joint
products, the total cost of
producing Giant is A.
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