Olive Company produces two products. In September, the joint costs of processing were $825,000. Production and sales data for the month were as follows:

Product	Kilograms Produced	Sales value at the split-off	Separable Costs
Product A	337,500	$137,750	$542,500
Product B	245,000	99,750	647,500

Required

(A) Compute the amount of joint costs allocated to each product using the sales value at splitoff.

(B) Compute the amount of joint costs allocated to each product using the net realizable value method.

(C) Compute the amount of joint costs allocated to each product using the constant gross margin percentage NRV method.

(D) Should management process these products beyond the splitoff point? Justify your answer. How would this decision would be affected by the results of the expected profits using the constant gross margin percentage of NRV and physical measure methods.

Answer rating: 100% (QA)

A To allocate the joint costs to each product using the sales value at splitoff we need to determine the total sales value at splitoff for both products combined Then we can allocate the joint costs b... View the full answer