Assume that the total sales value at the split-off point for product 1 is $50,000 instead of $130,000 and the sales value of product 3 is $2,000 instead of $20,000. Assume also that, because of its relatively low sales value, the firm treats product 3 as a by-product and uses the net realizable value method for accounting for joint costs. There are no separable processing costs for product 3. What amount of joint cost would be allocated to the threeproducts?

Transcribed Image Text:

Units at Split-Off 240 960 1,200 2,400 Sales Value at Split-Off $130,000 Product 50,000 20,000 $200,000