Point 1. Compute unit costs per pound for products A, B, and C, treating C as...

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Point 1. Compute unit costs per pound for products A, B, and C, treating C as a byproduct. Use the NRV method for allocating joint costs. Deduct the NRV of the byproduct produced from the joint cost of products A and B. 2. Compute unit costs per pound for products A, B, and C, treating all three as joint products and allocating joint costs by the NRV method. Problems 16-27 Methods of joint-cost allocation, ending inventory. Tivoli Labs produces a drug used for the treatment of hypertension. The drug is produced in batches. Chemicals costing $60,000 are mixed and heated, creating a reaction; a unique separation process then extracts the drug from the mixture. A batch yields a total of 2,500 gallons of the chemicals. The first 2,000 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $90,000 per batch. The output sold for human use is pasteurized at a total cost of $120,000 and is sold for $585 per gallon. The product sold to veterinarians is irradiated at a cost of $10 per gallon and is sold for $410 per gallon. In March, Tivoli, which had no opening inventory, processed one batch of chemicals. It sold 1,700 gallons of product for human use and 300 gallons of the veterinarian product. Tivoli uses the net realizable value method for allocating joint production costs. 1. How much in joint costs does Tivoli allocate to each product? Point 1. Compute unit costs per pound for products A, B, and C, treating C as a byproduct. Use the NRV method for allocating joint costs. Deduct the NRV of the byproduct produced from the joint cost of products A and B. 2. Compute unit costs per pound for products A, B, and C, treating all three as joint products and allocating joint costs by the NRV method. Problems 16-27 Methods of joint-cost allocation, ending inventory. Tivoli Labs produces a drug used for the treatment of hypertension. The drug is produced in batches. Chemicals costing $60,000 are mixed and heated, creating a reaction; a unique separation process then extracts the drug from the mixture. A batch yields a total of 2,500 gallons of the chemicals. The first 2,000 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $90,000 per batch. The output sold for human use is pasteurized at a total cost of $120,000 and is sold for $585 per gallon. The product sold to veterinarians is irradiated at a cost of $10 per gallon and is sold for $410 per gallon. In March, Tivoli, which had no opening inventory, processed one batch of chemicals. It sold 1,700 gallons of product for human use and 300 gallons of the veterinarian product. Tivoli uses the net realizable value method for allocating joint production costs. 1. How much in joint costs does Tivoli allocate to each product?

Answer rating: 100% (QA)

To determine the joint costs allocated to each product we need to use the net realizable value NRV m... View the full answer