Atlas Foods produces the following three supplemental food products simultaneously through a refining process costing $93,000. The
Question:
Atlas Foods produces the following three supplemental food products simultaneously through a refining process costing $93,000.
The joint products, Alfa and Betters, have a final selling price of $4 per pound and $10 per pound, respectively, after additional processing costs of $2 per pound of each product are incurred after the split-off point. Morefeed, a by-product, is sold at the split-off point for $3 per pound.
Alfa
10,000 pounds of Alfa, a popular but relatively rare grain supplement having a caloric value of 4,400calories per pound
Betters
5,000 pounds of Betters, a flavoring material high in carbohydrates with a caloric value of 11,200caloriesperpound
Morefeed
1,000 pounds of Morefeed, used as a cattle feed supplement with a caloric value of 1,000calories perpound
Question
Assuming Atlas Foods inventories Morefeed, the by-product, the joint cost to be allocated to Alfa using the net realizable value method.
Expert Answer:
To allocate the joint cost to Alfa using the net realizable value method we need to calculate the ne... View the full answer
