Tango Company produces joint products M, N, and T from a jointprocess. This information concerns a batch produced in April at ajoint cost of $140,000
Product Units Production and Sold Total Separable Costs Total Final Sales Value M
12,000
$13,400 $180,000 N 6,000 10,000 160,000 T 7,000 5,200 29,000
Required:
How much of the joint cost should be allocated to each jointproduct using the net realizable value method? (Enter youranswers in whole dollars.)
Product Allocated Joint Cost
M ___
N ___
T ___
Tango Company produces joint products M, N, and T from a jointprocess. This information concerns a batch produced in April at ajoint cost of $140,000
| Product | Units Production and Sold | Total Separable Costs | Total Final Sales Value |
M | 12,000 | $13,400 | $180,000 |
| N | 6,000 | 10,000 | 160,000 |
| T | 7,000 | 5,200 | 29,000 |
Required:
How much of the joint cost should be allocated to each jointproduct using the net realizable value method? (Enter youranswers in whole dollars.)
Product Allocated Joint Cost
M ___
N ___
T ___
Related questions
MC Qu. 37 Harmon Inc. produces joint products L, M, ...
Harmon Inc. produces joint products L, M, and N from a jointprocess. Information concerning a batch produced in May at a jointcost of $75,000 was as follows:
| L | M | N | Total | |
| Separable Processing cost | $10,000 | $25,000 | $2,000 | $37,000 |
| Units Produced | 1,200 | 2,500 | 4,300 | 8,000 |
| Sales Value (after addtâlprocessing) | $60,000 | $50,000 | $7,000 | $117,000 |
The amount of joint costs allocated to product N using the netrealizable value method is (calculate all ratios and percentages to4 decimal places, for example 33.3333%, and round all dollaramounts to the nearest whole dollar):
$3,614.
$4,688.
$23,438.
$33,434.
$46,875.
Joint Costing
Am I on the right track to correct answers? May you providefeedback for me? If I am not on the right track, then, can you showme why or why not?
A. Rockwell Company manufactures products C and R from a jointprocess. The total joint costs are $120,000. The net realizablevalue at split off was $140,000 for 8,000 units of product C and$60,000 for 2,000 units of product R.
1. Using the information in Part a,calculate the amount of joint costs to be allocated to Products Cand R using the NET REALIZABLE VALUE METHOD.
$ 84,000_________ allocated to ProductC $ 36,000________allocated to Product R
B. Darvin Company manufactures products A and B from a jointprocess, which also yields a by-product, X. Darvin accounts for therevenues from its by-product sales as other revenue.
Additional information follows: A BX Total
Unitsproduced 9,000 15,000 6,000 30,000
JointCosts ? ? ? $117,000
Sales value @ split off point $100,000 $100,000 $100,000$300,000
2. Using the information in Part b, calculated the amount ofjoint costs to be allocated to the products :
PHYSICAL UNITSMETHOD $ 43,875___ A $73,125_____B $0______ X
NET REALIZABLE VALUE METHOD $58,500___A $ 58,500____B $ 0______ X
C. Meyer Corp. manufactures products W, X, Y, and Z from a jointprocess. The JOINT COSTS amount to $120,000. Additional informationfollows:
PRODUCT Unitsproduced Sales Value @ split offpoint Further processingcosts Sales value after further
processing
W 7,000 $70,000 $7,500 $90,000
X 5,000 $60,000 $6,000 $70,000
Y 4,000 $40,000 $4,000 $50,000
Z 4,000 $30,000 $3,500 $32,000
Totals 20,000 $200,000 $21,000 $242,000
3. Using the information in Part c, find the following:
Product | Incremental Revenue | Incremental Cost | Process further? yes or no | *Net Realizable Value | $Amt allocated to product using NRVmethod |
w | $20,000 | $7,500 | Yes | $62,500 | $40,800 |
x | $10,000 | $6,000 | Yes | $54,000 | $36,000 |
y | $10,000 | $4,000 | Yes | $36,000 | $24,000 |
z | $2,000 | $3,500 | No | $30,000 | $19,200 |
* must consider whether or not product will be sold at splitor processed further
Answer the following questions related to jointcosts:
Are joint costs allocated to By-products? (yes or )___NO____
What are 2 ways that the proceeds fromby-products can be shown on the Income Statement?
Use the proceeds from the by-productto reduce the joint cost.
The proceeds from the by-product areshown as other revenue in the revenue section of the incomestatement.
The two asset recognition methods:The net realizable value method that shows the net realizable valueof the by-products on the incomestatement as a deduction from thetotal manufacturing cost of the joint products in the period inwhich the by-product is produced. OR The other income at productionpoint method that shows the net realizable value of by-products onthe income statement as other income or other sales revenue in theperiod in which the by-product is
The two revenue methods:The other income at selling point method shows the net salesrevenue from a by-product sold at time of sale on the incomestatement as other income or other sales revenue. OR Themanufacturing cost reduction at selling point method shows the netsales revenue from a by-product sold at time of sale on the incomestatement as a reduction of total manufacturing cost.
What is the difference between BY-PRODUCTS and SCRAP?
By-products are incidental products with a relatively low orminor value in comparison with the sales value of the jointproducts, yet have a positive net realizable value; the proceedsfrom by-products can be shown on the income statement as otherrevenue or as a decrease to the joint cost. On the other hand,scrap is an incidental product that has a negative net realizablevalue; the disposal cost related to the scrap is added to jointcost, which is allocated to the main products.
