Figure 6-4
Deli Products produces two products, X and Y, in a single process. In 2011, the joint costs of this process were £25,000. In addition, 4,000 units of X and 6,000 units of Y were produced. Separable processing costs beyond the split-off point were: X-£10,000; Y-£20,000. X sells for £10.00 per unit; Y sells for £7.50 per unit.
-Refer to Figure 6-4. What is the gross profit of product Y assuming the net realizable value method is used?
A)£13,636
B)£16,364
C)£30,000
D)£45,000

Question

Quizplus · Accepted Answer

The net realizable value of product Y is £7.50 per unit. The total net realizable value of the 6,000 units of Y is £45,000. The separable processing costs of product Y are £20,000. The gross profit of product Y is £45,000 - £20,000 = £25,000.

Figure 6-4 Deli Products Produces Two Products, X and Y, in a in a Single