Mainstream corporation manufactures two products, I and II, from a joint process. A production run costs $20,000 and results in 500 units of I and 2,000 of II.
The market price for the products at the split-off point is $20 per unit for I and $15 for II.
Both products may ne processed past the split off point, incurring separable costs of $5 per unit for I and $10 per unit for II. The market price is $25 for I and $20 for II.
Required
A. Allocate joint production cost using the physical units method and compute the joint production cost per unit for each product.
B. Allocate joint production cost to each product using the sales value at split off method and compute the joint production cost per unit for each product.
C. Allocate joint production costs to each product using the net realizable value method and compute the joint production cost per unit for each product.