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Problem - A joint production process that cost $240,000 generated two main products. P1 has 15,000 units and can be sold at the split-off point for $300,000. P2 has 25,000 units and can be sold at the split-off point for $200,000. A by-product can be sold for $30,000.
1. Using Net Realizable Value Method - How much of joint costs are allocated to P1 and P2?
2. Using physical quantities method - How much of joint costs are allocated to P1 and P2?
3. If the sale value of the byproduct is applied as cost to the byproduct, what is the redistribution of Cost allocated to P1 & P2 using NRV?
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