Cost Accounting

Exercise 1 Split Point Sales Value Method and Net Achievable Value Method

The company EVERYTHING FRESH EXCEPT THE CHICKEN buys birds to process and distribute them for human consumption. Three products are obtained from the process of these birds: "breasts, thighs and wings". During the month of November, the company acquired 50 birds as raw material at a total cost of $380.00 and incurred joint conversion costs of $70.00. In addition, the following data is available:

Using the above information, allocate the joint costs of production for the three products using the following methods:

1.Selling value method at split point.

2.Net realizable value method.

Product Process quantity Price at Additional cost Final price of split point the bird per bird XXX XXX Poultry breast Chicken thighs Chicken wings 50 100 $70 $50 $40 10 100 100 XXX XXX