If the joint production costs are allocated based on the net-realizable-value method,the amount of joint cost assigned to product Y would be:
A)$20,000.
B)$27,000.
C)$33,000.
D)$40,000.
E)some other amount.

Question

Quizplus · Accepted Answer

Net realizable value (NRV) method allocates joint costs based on the estimated selling price of each product at the split-off point minus the estimated cost to process and sell each product. Using this method, the joint cost allocated to Product Y ($55,000 - $22,000) would be $33,000. Therefore, the correct answer is C.

If the Joint Production Costs Are Allocated Based on the Net-Realizable-Value