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Concept explainers
Find Maximum Input Price: Estimated Net Realizable Value Method
Ticon Corporation’s manufacturing operation produces two joint products. Product delta sells for $24 per unit at the split-off point. After an additional $225,000 of
The joint process has only variable costs. In a typical month, the conversion costs of the joint products amount to $421,000. Materials prices are volatile, and if prices are too high, the company stops production.
Required
Management has asked you to determine the maximum price that the company should pay for the materials.
- a. Calculate the maximum price that Ticon should pay for the materials.
- b. Write a brief memo to management explaining how you arrived at your answer in requirement (a).
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Chapter 11 Solutions
Fundamentals Of Cost Accounting (6th Edition)
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