Should B product be processed further

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Reference no: EM132949830

Question - Joint Products and Costs - Van Company produces jointly two products A and B. The results of operation in 2011 were as follows:

Details

Product A

Product B

Total

Production

3000

5000

15000

Sales value at split-off point

$30000

$40000

$70000

Revenue

$90000

$120000

$210000

Separable costs

$15000

$9000

$24000

Joint product costs were $100000. There were no beginning inventories.

Required:

a. Allocate the joint costs using the physical output method.

b. Allocate the joint costs using the sales value at split-off point method.

c. Allocate the joint costs using the net realizable value method.

d. Allocate the joint costs using the constant gross margin NRV method.

e. Product B can be processed further. The cost of further process per unit is $5 per unit, and can be sold for $36 per unit. Should B product be processed further?

Reference no: EM132949830

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