Smart Enterprises buys MAIN Product, and at the end of processing the MAIN Product splits off...

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Smart Enterprises buys MAIN Product, and at the end of processing the MAIN Product splits off into Products A, B, and C. During March 2020, the joint costs of processing were AED 920,000. Production and sales value information for the March is as follows: If Processed Further Additional No. of units sold Selling price at Split-off point 400,000 250,000 350,000 Product Final Sales value 450,000 430,000 380,000 costs 24,000 units 15,000 units 21,000 units A 18,000 22,000 20,000 B Required: (Show calculations) 1- Calculate the joint costs allocated to each product if the company uses the estimated net realizable value method (NRV)? (30 marks) 2- If the company uses the physical quantity method for allocating the joint costs, calculate the gross margin for each product assuming that the products will be sold at the split off point? (30 marks) Smart Enterprises buys MAIN Product, and at the end of processing the MAIN Product splits off into Products A, B, and C. During March 2020, the joint costs of processing were AED 920,000. Production and sales value information for the March is as follows: If Processed Further Additional No. of units sold Selling price at Split-off point 400,000 250,000 350,000 Product Final Sales value 450,000 430,000 380,000 costs 24,000 units 15,000 units 21,000 units A 18,000 22,000 20,000 B Required: (Show calculations) 1- Calculate the joint costs allocated to each product if the company uses the estimated net realizable value method (NRV)? (30 marks) 2- If the company uses the physical quantity method for allocating the joint costs, calculate the gross margin for each product assuming that the products will be sold at the split off point? (30 marks)

Answer rating: 100% (QA)

1 Allocation of joint cost based on net realizable value Currency is AED Product A Produc... View the full answer