Chapter 11, Problem 37E

Net Realizable Value Method

Euclid Corporation processes a patented chemical, P-1, and produces two outputs. P-11 and P-12. In August, the costs to process P-1 are $144,000 for materials and $288,000 for conversion costs. P-11 has a sales value of $640,000 and P-12 has a sales value of $160,000.

Required

Using the net realizable value method, assign costs to P-11 and P-12 for August.