Memory Manufacturing Company (MMC) produces memory modules in a two-step process: chip fabrication and module assembly. In
Question:
In module assembly, each batch of standard chips is converted into standard memory modules at a separately identified cost of $1,000 and then sold for $8,500. Each batch of deluxe chips is converted into deluxe memory modules at a separately identified cost of
$1,500 and then sold for $25,000.
REQUIRED
1. Allocate joint costs of each batch to deluxe modules and standard modules using (a) the NRV method, (b) the constant gross margin percentage NRV method, and (c) the physical measure method, based on the number of memory bits. Which method should MMC use?
2. MMC can process each batch of 500 standard memory modules to yield 400 DRAM modules at an additional cost of $1,600. The selling price per DRAM module would be $26.
Assume MMC uses the physical measure method. Should MMC sell the standard memory modules or the DRAM modules?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Question Posted: