Reference no: EM132853786

Wadell Corp

The basic processing of raw materials in the Wadell Chemical Corporation's plant yields three semifinished products. Worlon, Nantron and Extron.

The budgeted cost of the basic processing for the current year is $3,110,000 Budgeted production price and separate processing cost data for the three products are as follows:

	Worlon	Nantron	Extron
Output in units	600,000	300,000	80,000
Selling price per unit	$          5.00	$        12.00	$        1.15
Separate processing costs:
Variable cost per unit	$          1.00	$          1.20	$        0.60
Fixed cost PER YEAR	$     300,000	$     240,000	$     22,000

Warlon and Nantron are accounted for as joint products. Extron is treated as a by-product.

Required:

1) Use the NRV method to allocate joint costs

2) Calculate the budgeted unit cost of each of the joint products for the current year under the absorption costing methid. Show any supporting calculations.