Dammam Petrochemical produces two products – Silka and Super A by a joint production process. Joint costs amount to $180
Posted: Thu May 19, 2022 12:43 pm
Dammam Petrochemical produces two products – Silka and Super A
by a joint production process. Joint costs amount to $180,000 per
batch of output. Each batch totals 15,000 tons: 20% Silka and 80%
Super A. Both products are processed further without gain or loss
in volume. Separable processing costs are Silka, $4.5 per ton
; Super A, $3 per ton. Silka sells for $31.5 per ton. Super A sells
for $21 per ton.
Required
If joint costs are
allocated on the Net Realizable Value basis (NRV), how much of the
joint costs will be allocated to Silka and Super A?
by a joint production process. Joint costs amount to $180,000 per
batch of output. Each batch totals 15,000 tons: 20% Silka and 80%
Super A. Both products are processed further without gain or loss
in volume. Separable processing costs are Silka, $4.5 per ton
; Super A, $3 per ton. Silka sells for $31.5 per ton. Super A sells
for $21 per ton.
Required
If joint costs are
allocated on the Net Realizable Value basis (NRV), how much of the
joint costs will be allocated to Silka and Super A?