Crucible Corporation operates an ore processing plant. A typical batch of ore run through the plant will
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Crucible Corporation operates an ore processing plant. A typical batch of ore run through the plant will yield three refined products: lead, copper, and manganese. At the split-off point, the intermediate products cannot be sold without further processing.
The lead from a typical batch will sell for $20,000 after incurring additional processing costs of $6,000. The copper is sold for $40,000 after additional processing costs of $5,000. The manganese yield sells for $30,000 but requires additional processing costs of $9,000. The costs of processing the raw ore, including the ore costs, amount to $50,000 per batch.
Use the net realizable value method to allocate the joint processing costs.
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