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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?
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