Computing joint costs—sales value at split-off and net realizable value methods
D.L. Manufacturing Inc.’s joint cost of producing 1,000 units of Product A, 500 units of Product B, and 500 units of Product C is $20,000. The unit sales values of the three products at the split-off point are Product A–$20, Product B–$200, and Product C–$160. Ending inventories include 100 units of Product A, 200 units of Product B, and 300 units of Product C.
- a. Compute the amount of joint cost that would be included in the ending
inventory valuation of the three products on the basis of their sales value at split off. - b. Assume that Product C can be sold for $200 a unit if it is processed after split-off at a cost of $25 a unit. Compute the amount of joint cost that would be included in the ending inventory valuation of the three products on the basis of their net realizable values.
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