Question 7. A firm produces three items from a single process in batches containing 40 units A (a by-product), 100 units B, 100 units C. Separable costs and selling prices are:

Joint process costs are $30 000 per batch.

What is the amount of joint costs that would be allocated to B using the net realisable value method, and treats by-product revenue as a reduction of the cost of the principal products?

A.

$7000

B.

$7500

C.

$15 000

D.

$14 000

A. $120,000

B. $80,000

C. $84,000

D. $91,000

Product Separable costs A Selling prices $50 per unit $160 per unit $450 per unit B $4000 $9000 Question 13. A firm incurs manufacturing costs totaling $240000 in process 1 to produce the following three beverages emerging from that process at the split-off point. Apple juice soldimmediatelyit emerges from Process 1 without further processing for $0.70 litre Apple cider: processed further in Process 2 at an additional cost of $0.66667 litre, then sold for $1.50 litre Apple pulp: processed further in Process 3 at an additional cost of $1.50 litre, then sold for $3.50 litre The following data relates to the period in which the joint costs were incurred. Beverage Apple juice Apple cider Apple pulp Litres produced 150 000 90 000 60.000 300 000 Litres sold 130 000 60 000 50 000 240 000 What is the amount of joint cost that would be allocated to apple juice if the net realisable value method had been used