Jordan, Inc. produces 2 products from a joint process costing $24,000. The results from the most recent period follow: Sales Value Separable Sales Value After
Product Tons at Split-Off Costs Further Processing
Alpha-1 800 $10,000 $12,000 $24,000
Alpha-2 400 8,000 4,000 20,000
Waste 200 --- --- ---
If Jordan uses the net realizable value method, the joint costs allocated to Alpha-1 would be:

Question

Quizplus · Accepted Answer

The net realizable value (NRV) method allocates joint costs based on the final sales value minus separable costs. For Alpha-1, NRV = $24,000 - $12,000 = $12,000. For Alpha-2, NRV = $20,000 - $4,000 = $16,000. Total NRV = $12,000 + $16,000 = $28,000. The allocation for Alpha-1 = ($12,000 / $28,000) * $24,000 = $10,286.