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. What amount of joint costs will be allocated to product X using the net realizable value net realizable value method?

Question

Quizplus · Accepted Answer

The net realizable value (NRV) method allocates joint costs based on the proportion of the net realizable value of each product. NRV for X = (4,000 units * $10) - $10,000 = $30,000. NRV for Y = (6,000 units * $7.50) - $20,000 = $25,000. Total NRV = $30,000 + $25,000 = $55,000. The proportion for X = $30,000 / $55,000. Joint costs allocated to X = $25,000 * ($30,000 / $55,000) = $13,636.

Deli Products Produces Two Products, X and Y, in a Single