Brite Surface Company Brite Surface Company produces four floor cleaners from the same process: C,D,E,and G Joint product costs are $9,000.(Round all answers to the nearest dollar.) If Brite Surface sells the products after further processing,the following disposal costs will be incurred: C,$2.50; D,$1.00; E,$3.50; G,$6.00.
Refer to Brite Surface Company.Using net realizable value at split-off,what amount of joint processing cost is allocated to Product C?

Question

Brite Surface Company Brite Surface Company produces four floor cleaners from the same process: C,D,E,and G Joint product costs are $9,000.(Round all answers to the nearest dollar.)  If Brite Surface sells the products after further processing,the following disposal costs will be incurred: C,$2.50; D,$1.00; E,$3.50; G,$6.00.
Refer to Brite Surface Company.Using net realizable value at split-off,what amount of joint processing cost is allocated to Product C?

Quizplus · Accepted Answer

To determine the net realizable value at split-off for each product, we need to subtract the disposal costs from the selling price. 
For product C: 
Selling price - disposal cost = NRV at split-off 
$26.00 - $2.50 = $23.50

The allocation of joint processing cost to product C can be calculated using the following formula: 
Joint cost allocation = (NRV at split-off / total NRV for all products) x total joint processing cost

For Brite Surface Company: 
Total NRV for all products = ($23.50 x 400) + ($25.00 x 1,000) + ($28.00 x 600) + ($33.00 x 200) = $31,900

Joint cost allocation for product C = ($23.50 / $31.90) x $9,000 = $6,633.54

Rounded to the nearest dollar, the allocated joint processing cost for product C is $1,017.

Brite Surface Company Brite Surface Company Produces Four Floor Cleaners