Chapter 7 BEX

BEX.07.10

only need answers dont need work please answer in same format

Allocating Joint Costs Using the Net Realizable Value Method A company manufactures three products, L-Ten, Triol, and Plaze, from a joint process. Esch production run costs $12.900. None of the products can be sold at spit-off, but must be processed further. Information on one batch of the three products is as follows: Further Processing Cost per Gallon Eventual Market Price per Gallon Product Gallons L-Ten 3,500 $0.50 $ 2.00 Trio 4,000 1.00 5.00 Ploze 2.500 1.50 6.00 Requiredi 1. Allocate the joint cast to L. Tan, Trial, and Pioze using the not realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation L-Ten 2,084 x 6,351 Triol Plaze 12,900 X Total $ 18,000 X X 2. What if it cost $2 tu process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation 4,465 x L-Ten $ Trol 4,465 x Pince 4,465 x Total 4,465 x Fandt - The Wy want 1. The net realizable value method is used when one or more of the joint products cannot be sold at split-off. In this case, a hypothetical market value is constructed so that joint cust alocation can be done as close to the split-off point as possible. An example of how to allocate using this method 2. Show the effect of the change in cost See Example 7.10